When a Business Partner Is Taking Money From Your Company

If your business partner is stealing from the company, Florida law gives you civil options. The right step depends on your operating agreement and the facts. This page explains how to tell theft from mismanagement, which remedies may apply, and what to protect before you confront anyone. It is general information, not legal advice, and no particular result is promised.

What It Means When a Partner Takes Company Money

Depending on the operating agreement, whether the use was authorized, and who owes the duty, taking company money or property for personal use may be a breach of fiduciary duty. In a manager-managed LLC, members generally do not owe these duties. Under Florida law, a manager of a manager-managed LLC, or a member of a member-managed LLC, owes duties of loyalty and care to the company and its members. Under the Florida LLC standards of conduct, a member of a member-managed LLC, or a manager of a manager-managed LLC, must account to the company and hold as trustee for it any property, profit, or benefit derived in conducting or winding up the company’s activities, from using company property, or from appropriating a company opportunity.

This page is for owners, co-owners, and members of Miami-Dade and Broward businesses. That includes LLCs, partnerships, and other business structures. It covers civil remedies available to business owners under Florida’s LLC act. Criminal charges are decided by prosecutors, not in a civil dispute.

Theft, Diversion, or Mismanagement: How to Tell

The key difference is conduct and intent. Florida’s duty of care bars grossly negligent or reckless conduct, willful or intentional misconduct, and knowing violations of law. A bad business decision alone is usually a different problem than deliberate diversion.

Watch for these warning signs:

• Transfers to personal accounts with no business purpose
• Cash withdrawals with no records
• Reimbursements without receipts
• Personal expenses on company cards
• Payroll to relatives who don’t do the work
• A side business that uses company customers or equipment
• Missing, altered, or delayed financial records

Can a partner withdraw funds without your consent? It depends on three things: the operating agreement, who holds signature authority on the bank accounts, and the distribution rules. The operating agreement rules govern relations among members. Florida’s LLC act supplies default rules where the operating agreement is silent, and under s. 605.0105 the operating agreement cannot vary certain provisions of the act.

What the Civil Remedies Cover

Florida’s LLC act gives members several tools. Each one has its own rules and limits.

• Records rights. Depending on how the LLC is managed, a member may have a right to certain company information, subject to limits under s. 605.0410 such as materiality, purpose, and reasonable restrictions. In a member-managed LLC, the company generally must furnish information material to a member’s rights. In a manager-managed LLC, a member’s demand must describe the information sought with reasonable particularity and state a purpose material to the member’s interest, and the information must be directly connected to that purpose. The member records rules set out these duties.
• Court-ordered inspection. If the company refuses to allow inspection, the circuit court can order it. The court inspection statute also lets the court order the company to pay reasonable attorney fees in some cases.
• Direct and derivative claims. A direct claim is for your own injury. A derivative claim enforces a company right, and it generally requires a demand first. The steps that come before filing a derivative action can depend on the specific facts of the company and the dispute.
• Dissolution and buyout. Under s. 605.0702(1)(b), a member may ask a court to dissolve an LLC in limited circumstances, including when all or substantially all of the company’s activities are unlawful. Under s. 605.0706, in a dissolution proceeding a member starts under s. 605.0702(1)(b), the company, or if it does not, one or more other members, may elect to purchase the petitioner’s entire interest at fair value. The election generally must be filed within 90 days after the petition is filed, or at a later time the court allows.

Protect the Company Before You Confront Your Partner

Protect records and money first, and talk to your partner second. Confronting someone too early can lead to deleted files, sudden withdrawals, or a hostile exit.

• Save bank statements, accounting exports, emails, texts, and receipts. Keep originals safe and make copies.
• Start a dated log of what was taken, when, and who had access.
• Before pausing informal payments or reimbursements to the partner, have the operating agreement reviewed, because withholding a payment the agreement requires could itself be a breach.
• Talk with counsel before you change bank passwords or signature cards. Some changes can breach the operating agreement.
• Don’t accuse the partner in front of employees, vendors, or customers until the facts are confirmed.

What Proof Is Needed to Accuse a Partner

Gathering records that connect a partner to particular transfers or decisions can help clarify what happened. Useful evidence includes general ledgers, bank records, tax returns, contracts, written communications, and witness statements.

A forensic accountant may be needed to trace where money went. Whether one is needed depends on the case.

Time matters too. Florida’s limitations statute sets deadlines for different claims. Keep a record of when you found each problem.

How the Process Works: Steps and Timing

Most partner disputes follow these stages, though the order depends on the agreement and the other side’s response.

1. Consultation. We review the facts, the governing documents, and the company’s immediate risks.
2. Records review. A consultation can cover the financial trail, the issues it raises, and possible options.
3. Demand letter. A formal notice to the partner can request an accounting or records.
4. Negotiation or mediation. Many disputes settle at this stage, if the agreement and facts allow.
5. Litigation. If settlement fails, a case may proceed with filings and discovery. Court calendars control the pace.

Timelines vary. We don’t promise a schedule or a result.

Why Work With KEW Legal on Partner Disputes

KEW Legal is a Florida business law firm with offices in Coral Gables and Sunny Isles Beach. The firm acts as outside general counsel for business owners and investors in Miami-Dade and South Florida. Its work covers partnership disputes, business contracts, employment matters, and commercial leases. This page is responsibility of KEW Legal, with the Coral Gables office as the office for this topic.

The firm’s model is ongoing counsel. That includes reviewing operating agreements and updating them to address signature authority, distributions, and buyouts before a dispute starts. The firm doesn’t claim special influence with courts or regulators. It describes what the service covers and how the work is done.

If a matter falls outside what the firm handles, the firm may refer you to another lawyer or firm.

Frequently Asked Questions

Talk With the KEW Legal Team in Coral Gables

If you think a co-owner is moving money or records out of your company, the choice in front of you is whether to act now or wait. Waiting can cost you evidence and time. Let’s review your operating agreement, the financial trail, and the steps that protect your company. Call 305-990-2300, send a message, or schedule a consultation with KEW Legal.