In Florida, partners are expressly permitted to leave a partnership at any time as long as it is not in contravention of a partnership agreement or leaves as a result of going bankrupt during the term of the partnership. Florida has adopted the Revised Uniform Partnership Act. This allows the partnership to be treated as an entity, and therefore allowing it to continue to exist once the partners leave.
However, a partner’s duties and obligations to the partnership do not cease when they leave the partnership. It is important to understand what duties remain if you plan to leave your partnership.
In some cases, there might be relatively few duties if any. It depends on the size of the organization that you were working with and the type of services that they provide. Business law is a complex construct that can sometimes change depending on specific circumstances.
That being said, the state of Florida and the Miami area in particular have taken the time to spell out most of the duties that you’d run into, so you won’t have to worry about too much in the way of guesswork when you take care of these sorts of issues.
Duties Incurred By Those Who Leave A Partnership
Partners planning to leave a partnership owe the partnership the duties of loyalty and care until they have officially dissociated. The duty of loyalty means that the leaving partner must keep the partnership’s best interests in mind, placing them ahead of his own. A partner cannot, for example, move onto another business venture, and begin to place his new venture’s best interests ahead of his corporation. The leaving partner must continue to work for the best interests of the old partnership.
Additionally, partners must continue to live up to their duty of care obligations. The duty of care mandates that the fiduciary use due diligence in his transactions for the partnership. A partner cannot let up in how he handles his business as a partner, even if he has decided he is going to leave the partnership. A dissociating partner must continue to use due diligence in the business he transacts for the partnership.
Technically, the same could really be said of any business venture of any kind. If you were to be legally obligated to use a certain degree of diligence in a transaction, then it would be expected that you would exercise such caution. Keep in mind that this could run into a conflict of interest scenario where you might be questioned regarding a certain decision made in your favor.
While you’re no longer part of the partnership between two different individuals, there’s a good chance that you should still be exercising caution and the same level of reason that you would have used had you needed to complete any other transaction while you were still a member of said group.
Keep in mind that as time passes, the possibility for such transactions to occur decreases. In many cases, it does so exponentially, so there’s little reason for concern once a certain point has been reached. On the other hand, larger interconnected companies that spin off of one another might have to be more careful since their organizations are somewhat intertwined due to the nature of the services or products they provide as well as the market sector that they’re in.
Duties of Partners
A partner cannot simply ignore his duties when he decides to dissociate from the partnership. Failing to live up to his duties can lead the partner to compensate the partnership for waste that occurred as a result of his transgressions.
Consulting with the right legal team can help determine if an outgoing partner has violated his duties to the partnership and whether the partnership can recoup money from the outgoing partner. Once the partnership is properly dissolved, however, they’ll finally be allowed to go their separate ways. A skilled legal professional will be able to do the best job of ensuring that your partnership has been completely split up and is taken cared of on all levels.
You’ll want to make sure that if anything has gone awry that you’re working with the right kind of legal team for your business venture. Our team is always here to help you out with any business law questions that you might have.
Find the Right Legal Team for Your Partnership-Related Issues At Trembly Law
At the Trembly Law Firm, we’ve done our best to help people sort out their business-related problems and both form and dissolve partnerships in the most equitable way possible. Our business attorneys are ready to help you determine equal shares and to reduce liability.
If you’ve run into some kind of issue, then make sure to use our online contact form. Get in touch with legal professionals who will help you to get things sorted out as quickly as possible.