Business Divorce Attorneys
Separating co-owners of a Florida LLC or corporation through negotiated buyout, statutory buyout, or judicial dissolution, for businesses in Florida, D.C., Massachusetts and New York.
A business divorce is the separation of co-owners who can no longer run a company together. The partnership has soured, one owner has been frozen out, the two sides are deadlocked, or one side is taking from the company what belongs to both. The company may be worth saving, or the only fair outcome may be to unwind it. Either way the owners need a process, and Florida law provides several.
Industria Business Lawyers represents members of Florida limited liability companies and shareholders of Florida corporations on both sides of these disputes: the owner seeking to leave with fair value, and the owner or company seeking to keep the business intact. Chapter 605 of the Florida Statutes governs LLCs and chapter 607 governs corporations, and each provides grounds for judicial dissolution, alternatives to dissolution, and a mechanism for buying out the departing owner. We handle the negotiation, the litigation where negotiation fails, and the valuation fight that sits underneath both.
Every company is different, and the operating agreement or shareholder agreement usually decides more than the statute does. Reading it is the first step.
Business Divorce Matters We Handle
The statutes provide the grounds and the remedies. The agreement between the owners provides the rest.
Judicial Dissolution of an LLC
Under Florida Statute 605.0702(1)(b), a circuit court may dissolve a limited liability company in a proceeding by a manager or member where it is established that the conduct of all or substantially all of the company’s activities is unlawful, that it is not reasonably practicable to carry on the company’s activities in conformity with the articles of organization and the operating agreement, or that the managers or members in control have acted, are acting, or are reasonably expected to act in a manner that is illegal or fraudulent, among other grounds. The reasonably practicable standard is where most LLC deadlock cases are fought.
Judicial Dissolution of a Corporation
Under Florida Statute 607.1430(1)(b), a circuit court may dissolve a corporation in a proceeding by a shareholder where the directors are deadlocked and the shareholders cannot break it, with irreparable injury threatened or the business no longer able to be conducted to the shareholders’ advantage; where the shareholders are deadlocked in voting power and have failed to elect successor directors; where corporate assets are being misapplied or wasted; or where those in control are acting in a manner that is illegal or fraudulent, among other grounds.
Alternatives to Dissolution
Florida Statute 607.1434 allows the court, as an alternative to dissolution, to appoint a receiver or custodian, appoint a provisional director, order a purchase of the petitioning shareholder’s shares, or grant other equitable relief. A dissolution petition is often the lever that produces one of these outcomes rather than the dissolution itself.
Statutory Buyout of an LLC Member
Under Florida Statute 605.0706, in a proceeding by a member under section 605.0702(1)(b), the company may elect, or if it fails to elect one or more other members may elect, to purchase the entire interest of the petitioning member at fair value. The election is irrevocable unless the court finds it equitable to set aside or modify, and it must be filed within 90 days after the petition unless the court allows later. The election turns a dissolution case into a valuation case.
Freeze-Outs and Oppression
An owner who has been removed from management, cut off from distributions, denied information, or diluted faces a set of claims that depend on the entity type and the agreement: breach of fiduciary duty, breach of the operating or shareholder agreement, and the statutory grounds above. Our LLC member dispute page and shareholder dispute page cover those claims in detail.
Negotiated Separation
Most business divorces settle. The terms cover price, payment schedule, security for deferred payments, releases, non-competition where enforceable, transition of customers and employees, and the treatment of company debt and personal guaranties. We negotiate from a valuation and a litigation position that has already been prepared, because that is what moves the other side.
LLC or Corporation: Why the Entity Type Changes the Case
Florida gives LLCs and corporations parallel but different statutes, and the differences matter at every step.
Grounds. Section 605.0702 for LLCs and section 607.1430 for corporations each list the grounds on which a court may order dissolution. The LLC statute’s reasonably practicable standard and the corporate statute’s deadlock and waste standards overlap but are not identical, and the facts that satisfy one may not satisfy the other.
Buyout. Section 605.0706 gives an LLC and its other members an election to buy the petitioner out at fair value within 90 days of the petition. Section 607.1434(1)(c) lets a court order the purchase of a petitioning shareholder’s shares as an alternative to dissolving a corporation. The mechanics, timing, and who controls the election differ.
The agreement. An operating agreement can set the events that cause dissolution under section 605.0701(1) and can address buyout terms, valuation methods, and transfer restrictions. A shareholder agreement can do the same for a corporation. Where the agreement speaks, it usually governs, and where it is silent, the statute fills the gap.
Where we practise. Florida first. Business divorce matters in D.C., Massachusetts and New York are handled with the firm’s admitted attorneys and of counsel in those jurisdictions under their own entity statutes. Our business litigation page covers the full range of disputes we handle.
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How We Work a Business Divorce
The operating or shareholder agreement, the articles, the books and records, the capital accounts, and the history of distributions and management decisions.
What the client wants: to leave with fair value, to remove the other owner, or to keep the company running, and which statutory and contractual routes lead there.
What the interest is worth on the standard the statute or the agreement applies, with a valuation professional engaged early, because the number drives everything after it.
A written position with the valuation and the litigation alternative set out, and a negotiation aimed at a separation agreement.
Where negotiation fails, the dissolution petition under section 605.0702 or 607.1430, or the response and the buyout election under section 605.0706 or the alternative remedies under 607.1434.
Discovery, the fiduciary and contract claims that accompany the petition, and the hearing on dissolution, buyout, or alternative relief.
The closing documents, payment and security terms, releases, and the transition of the business or its wind-up.
FAQ
01 • Business Disputes My partner and I are deadlocked. Can I force the company to be dissolved?
For a Florida LLC, section 605.0702(1)(b) allows a member to seek dissolution where it is not reasonably practicable to carry on the company’s activities in conformity with its governing documents, among other grounds. For a corporation, section 607.1430(1)(b) allows a shareholder to seek dissolution on deadlock and other grounds. Whether the facts meet the standard, and whether the court would order an alternative instead, depends on the case.
02 • Business Disputes Can the company buy me out instead of dissolving?
Yes, for an LLC. Section 605.0706 lets the company, or if it does not the other members, elect to purchase the petitioning member’s entire interest at fair value within 90 days of the petition. For a corporation, section 607.1434 lets the court order a purchase of the petitioner’s shares as an alternative to dissolution.
03 • Business Disputes What does fair value mean?
The statute uses the term without a fixed formula, and the operating or shareholder agreement may define it. In practice it is determined by valuation evidence, and disputes over discounts, control, and the valuation date are common. A valuation professional is engaged early for that reason.
04 • Business Disputes My co-owner has cut me off from information and distributions. What are my options?
Information rights, distribution rights, and fiduciary duties are governed by the entity statute and the agreement. The remedies range from a books and records demand to a fiduciary duty claim to a dissolution petition. Which one fits depends on what the agreement provides and what the other owner has done.
05 • Business Disputes Does the operating agreement control over the statute?
Largely. Section 605.0701(1) makes an event stated in the operating agreement a cause of dissolution, and the agreement can set buyout and valuation terms. Where the agreement is silent, the statute governs. Reading the agreement is always the first step.
Co-owners of businesses in Florida, D.C., Massachusetts and New York. Call (202) 860-1210 or describe the situation through the form. Free consultation. Every company is different, and the agreement usually decides more than the statute. We will tell you what your options are and what your interest is worth leaving with.
This page provides general information about business divorce, judicial dissolution, and buyouts under Florida law and does not constitute legal advice. Reading it does not create an attorney client relationship. Statutes cited were read on the date this page was last updated and are subject to change. Whether a particular owner has a claim or a remedy depends on the specific facts and the governing agreement.