Starting a business with a partner is often exciting. You may share a vision, trust each other, and assume you’ll always be on the same page. But even well-intentioned partnerships can fall apart if the legal and operational structure isn’t solid from the start. As a Florida business law attorney based in Seminole and serving clients across Tampa Bay and St. Petersburg, I’ve seen many successful partnerships break down—not because of bad intentions, but because they didn’t take key legal precautions. Understanding the most common partnership mistakes can help you avoid costly disputes that drain time, money, and relationships.
Whether you’re launching a Florida LLC, corporation, or general partnership, it’s critical to structure things properly from the beginning. A clear operating agreement, partnership agreement, or shareholder agreement is essential. Without one, your business is vulnerable to conflict that could end up in court under Florida’s default statutes.
Failing To Clearly Define Ownership Percentages
One of the most common causes of partnership conflict is uncertainty about who owns what. You may have verbally agreed on a 50/50 split, but unless that’s documented and reflected in your official agreements and tax filings, misunderstandings can arise. Disputes often surface when the business becomes profitable—or when it starts to fail. Florida courts will look to the written agreement (or lack thereof) to determine each party’s stake.
Under Florida Statutes Chapter 620, which governs general partnerships, partners are presumed to share equally in profits and losses unless otherwise agreed. That presumption can cause problems if one partner contributed more capital or took on more risk. A clear agreement prevents these issues.
Unequal Contributions Without A Formal Agreement
When one partner puts in more time, money, or resources than the other, and there’s no formal structure to recognize that imbalance, resentment builds. I’ve worked with clients where one partner expected sweat equity to count, while the other thought cash investment entitled them to a greater share. These misunderstandings become flashpoints during dissolution or buyout discussions.
You need to define what each partner is contributing and how that translates into ownership, voting rights, and profit distributions. Without it, the relationship may suffer, and your business could be derailed.
Not Defining Each Partner’s Role Or Authority
Unclear roles lead to confusion and power struggles. Who manages day-to-day operations? Who signs contracts? Who handles finances? If these responsibilities aren’t clearly assigned, it’s easy for partners to feel undermined or left out. In the worst cases, one partner may bind the business to a deal that the other partner disagrees with.
Florida law generally gives each partner equal management rights unless your agreement says otherwise. By putting roles in writing, you prevent overlapping responsibilities and reduce the risk of unauthorized actions that harm the company.
Operating Without A Written Partnership Or Operating Agreement
Oral agreements may seem easier at the start, but they often fall apart under stress. Even friends and family members who trust each other benefit from putting things in writing. A well-drafted agreement covers ownership, decision-making, dispute resolution, exit strategies, and what happens if a partner wants out.
Without an agreement, the Florida courts will apply default rules under Florida Statutes § 605.0105 (for LLCs) or 620.8401 (for partnerships). These defaults may not reflect your intent and can lead to outcomes you never expected.
Failing To Plan For Disagreements Or Deadlock
What happens if you and your partner can’t agree? Many business agreements are silent on this issue. Without a deadlock-breaking mechanism—like a buy-sell clause, mediation requirement, or third-party tiebreaker—you could find your business paralyzed. This often leads to dissolution or litigation.
Planning for disagreement doesn’t mean you expect failure—it means you value stability. A strong agreement includes a process for resolving major disagreements and ensuring the business can continue even if the partners reach an impasse.
Mixing Personal And Business Finances
Another major source of conflict is when partners use business accounts for personal expenses, fail to document reimbursements, or fail to separate their finances. Not only does this create friction, but it can also cause tax and liability issues that threaten the integrity of your business.
Always keep business finances completely separate and maintain proper records. This not only avoids partnership disputes but also helps preserve liability protection in LLCs and corporations.
Ignoring Exit Planning Or Buyout Terms
Every business partnership will eventually end—whether due to retirement, death, disagreement, or success. Failing to plan for that reality is a serious mistake. If one partner wants to leave, how will their interest be valued? Who can buy it? Can it be sold to an outsider?
Without a buy-sell agreement or exit clause, these questions often result in prolonged legal battles. Your agreement should lay out what happens if a partner exits, and how that exit will be handled financially and operationally.
Frequently Asked Questions About Florida Business Partnerships
Does Florida Require A Written Partnership Agreement?
No, Florida does not require a written partnership agreement. However, without one, your partnership will be governed by default rules under Florida Statutes Chapter 620, which may not reflect your business’s goals or each partner’s expectations. A written agreement offers clarity and protection.
Can One Partner Bind The Business Without The Other’s Consent?
Yes, unless your partnership or operating agreement says otherwise, each partner in a Florida general partnership has the authority to act on behalf of the business. That includes signing contracts and incurring debts. If you want to limit authority, it must be addressed in writing.
What Happens If One Partner Wants To Leave The Business?
Without a written agreement, the departing partner may be entitled to a share of the business’s value, but the process can be messy. A well-drafted agreement should include a buy-sell clause that outlines how the departing partner’s interest will be valued and purchased.
Can I Remove A Business Partner In Florida?
Removing a partner typically requires legal grounds or a written provision allowing removal. Without a clear agreement, it may require court intervention. In LLCs, removal must comply with Florida Statutes § 605.0602, which allows judicial removal in limited circumstances.
How Can I Avoid Disputes With My Business Partner?
The best way to avoid disputes is to have a clear, written agreement that defines ownership, roles, responsibilities, dispute resolution methods, and exit strategies. Regular communication and documented decision-making also help reduce misunderstandings and conflict.
Do I Need A Lawyer To Draft A Partnership Or Operating Agreement?
Yes, it is highly advisable. Generic templates often leave out critical provisions and may not comply with Florida law. An attorney can draft an agreement tailored to your specific business and risk profile, reducing the chance of future legal disputes.
Call Corey Szalai Law, PLLC To Protect Your Florida Business Partnership
If you’re starting a business or already in a partnership and want to prevent future disputes, I can help you structure your business relationships the right way. At Corey Szalai Law, PLLC, I work with entrepreneurs and business partners throughout Seminole, Tampa Bay, and St. Petersburg to draft solid agreements and resolve partnership conflicts.
Contact our Seminole business contract attorney at Corey Szalai Law, PLLC, at (727) 300-1029 to schedule a consultation. Our firm is located in Seminole, Florida, and I serve business clients throughout the region with trusted legal guidance that protects what you’re building.