A co-owner who finds missing construction company money should first preserve the records, then match each transfer against the company’s governing documents. Florida law sets duties for partners, members, and managers who control company money. Which claim fits depends on how your company is organized and what its written agreements say. This page covers the records to save, the main claim types, construction payment rules, and the remedies Florida courts and arbitrators can address.
What a Co-Owner Can Do When a Partner Takes Company Money
A co-owner can protect company records and compare each withdrawal against the written rules that govern the business. Money can leave a company in many ways. A partner may pay personal bills from a business account, send job payments to a new account, or take pay without approval. Some withdrawals are authorized. Others are not.
Withdrawals often look ordinary one at a time. Lined up by date and payee, they can tell a clearer story. Build that comparison before you raise the issue with the partner.
Start with the governing documents. An LLC has an operating agreement. A corporation has bylaws and often a shareholder agreement. A partnership has a partnership agreement. These papers show who may take money and who must approve it. The entity type also matters, because LLCs, corporations, and partnerships follow different rules.
Timing matters too. The paper trail often shapes what can be proven, and records are easier to keep intact when you act early. Acting in an organized way usually protects more options than reacting in the moment.
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Records to Preserve Right Away
The most useful records are bank statements, accounting data, governing documents, and job files, saved in their original form.
- Bank and credit card statements for every company account, including transfers to personal accounts.
- Accounting data such as ledgers and audit trails, with the dates of each entry.
- Operating, shareholder, or partnership agreements, plus minutes and written approvals for any distribution.
- Job files: contracts, change orders, draw requests, lien waivers, invoices, and owner payment records.
- Emails and texts in original form. Screenshots alone can lose dates and senders.
Keep a dated timeline of what you noticed, when you noticed it, and who had access to the accounts. Store copies outside company systems. One common mistake is moving or deleting files before copying them. Another is rewriting a ledger to match the bank. Both can make the records harder to rely on. Do not confront the partner in a way that could prompt records to disappear.
Fiduciary Duty Claims Versus Contract Claims
A fiduciary duty claim rests on duties the law places on managers of manager-managed LLCs and members of member-managed LLCs, who owe duties of loyalty and care to the company and its members. A contract claim rests on the company’s written agreement.
In an LLC, each manager of a manager-managed LLC and each member of a member-managed LLC owes duties of loyalty and care to the company and its members (Fla. Stat. § 605.04091). The duty of loyalty requires a manager or member to account for and hold as trustee for the company any property, profit, or benefit derived by that person in the company’s activities, from use of company property, or from appropriating a company opportunity. It also requires refraining from dealing with the company as, or on behalf of, a person having an interest adverse to the company, except as permitted by s. 605.04092, and refraining from competing with the company before its dissolution. The duty of care covers grossly negligent or reckless conduct, willful misconduct, and knowing violations of law. A member does not violate a duty only because the conduct also helps that member.
Partners owe similar duties under Fla. Stat. § 620.8404. Under § 620.8405, a partnership can sue a partner for breaching the partnership agreement or for a duty violation that harms the partnership.
A contract claim looks at the operating, shareholder, or partnership agreement. Common terms include distribution rules, capital contributions, buy-sell rights, and non-compete promises. The practical difference is who can sue, what must be proven, and whether an arbitration clause applies. Choosing the wrong label can delay a case.
If the other owners will not act on a company right, an LLC member may need to make a formal demand first. Under § 605.0802, a derivative action is allowed after a demand, unless the demand would be futile or waiting would cause irreparable injury. The other members (in a member-managed LLC) or the managers (in a manager-managed LLC) get a reasonable time to act, not to exceed 90 days.
Fraud, Conversion, and Theft by Deception
Fraud and civil theft claims focus on false statements and wrongful taking, and each one carries its own proof rules.
In Frutafino, S.A.S. v. Dole Chile, S.A., the court quoted Mejia v. Jurich: “if the plaintiff can demonstrate that the person promising future action does so with no intention of performing or with a positive intention not to perform, such a promise may also constitute a fraudulent misrepresentation.” A promise of future action can also count. Florida’s Third District Court of Appeal recognizes that such a promise may be fraud if the person making it had no intention of performing (Frutafino, S.A.S. v. Dole Chile).
The company may also claim that the partner wrongfully took money that belonged to it. Each claim needs different proof, so the same bank statement may support one claim and not another.
Florida’s civil theft remedy requires proof by clear and convincing evidence. If the claim succeeds, the statute allows threefold actual damages, minimum damages of $200, and reasonable attorney’s fees and court costs; but if the court finds the claim was without substantial fact or legal support, the defendant can recover its reasonable attorney’s fees and court costs (Fla. Stat. § 772.11). Before filing, the injured person must make a written demand for $200 or the treble damage amount. Punitive damages are not available under that section.
A criminal report and a civil lawsuit are separate processes, each with its own rules. Keep the two tracks apart in your planning.
Claims Against Others Who Helped or Benefited
Outside parties who knowingly helped or received diverted money may face claims, and what they knew matters.
A business interference claim requires an actual, identifiable relationship that in all probability would have been completed without the interference (Ozyesilpinar v. Reach PLC).
Florida law also treats a transfer as fraudulent as to a creditor when the debtor made it with actual intent to hinder, delay, or defraud that creditor (§ 726.105). The statute lists factors such as transfers to an insider and concealed transfers. Unpaid subcontractors and suppliers may be creditors, so these rules can matter in a construction dispute.
A person who received diverted funds may face a claim too. What that person knew and gave in exchange matters.
Construction Trust Funds, Liens, and Deadlines
Unpaid subcontractors and suppliers may still have claims against the company, so each job’s payment status needs quick review.
For claims on a payment bond on which the principal is a contractor, subcontractor, or sub-subcontractor, § 95.11 requires the action to be commenced within one year, running from the last furnishing of labor, services, or materials, except for actions governed by s. 255.05(10), s. 337.18(1), or s. 713.23(1)(e). If the contractor is the bond principal, it runs from the contractor’s last furnishing, whichever is later.
Under § 95.11, actions other than for recovery of real property must be commenced within the time periods the statute sets out. Laches is a separate equitable doctrine, but § 95.11(7) provides that laches shall bar any action unless it is commenced within the time provided for legal actions concerning the same subject matter, regardless of the defendant’s lack of knowledge that the claimant would assert rights and whether the defendant is prejudiced by the delay.
A lien deadline is not the same as a deadline for suing a partner, so do not assume one date covers both. You can read more about construction lien litigation in Tampa.
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Unlicensed Contracting and Enforceability
If the company or partner did contracting work without the right license, document it, because license status can affect claims and defenses.
The Florida Department of Agriculture and Consumer Services lists common contractor scam warning signs. These include taking a deposit without starting work and taking final payment before the job is complete (FDACS contractor scam warning signs).
Write down who held each license, which entity signed each contract, and what work was done. Those facts can matter when a court or arbitrator reviews the contract and the claims built on it.
Remedies Florida Courts and Arbitration Can Provide
Florida courts and arbitrators can order an accounting, award money damages, and grant other relief the proof supports.
An accounting is often the first step, because the numbers can show gaps before damages are argued. Damages then follow the proof and can cover diverted funds and other losses the company can prove.
Arbitration is another path. A written agreement to arbitrate is generally valid and enforceable (§ 682.02). A court decides whether an arbitration agreement exists. An arbitrator decides certain questions, such as whether the contract containing the agreement is enforceable.
Some claims have short clocks. An action over an improper distribution from an LLC is barred unless commenced within 2 years after the distribution (§ 605.0406). Time limits differ by claim, so check each one early.
Working With Ayala Law PA on a Co-Owner Dispute
Ayala Law PA focuses on business litigation, shareholder disputes, construction litigation, and related commercial matters in Florida courts and arbitration.
The firm serves businesses and entrepreneurs in Tampa, Hillsborough County, Brandon, Riverview, Plant City, Temple Terrace, and the Tampa Bay area. Its only office is at 1646 W Snow Ave in Tampa, Florida.
Eduardo A. Maura is the responsible lawyer for this page. Our team helps organize the documents you gather for review.
If a matter may be referred to another lawyer or firm, we will say so. Fee terms are explained directly when you reach out.
Common questions
Can you sue a business partner for deception?
Possibly. Civil theft requires clear and convincing evidence, and a fraud claim turns on the statements made and what the company relied on.
How long do I have to sue over an improper LLC distribution?
Under Florida’s LLC rule, the action is barred unless it is commenced within 2 years after the distribution.
Do I have to go to arbitration?
If a valid written arbitration agreement covers the dispute, it is generally enforceable. A court decides whether that agreement exists.
Can an unpaid subcontractor still make a claim?
Possibly. Payment bond and lien rules each have their own deadlines, so review them promptly.
If your partner moved money out of your construction company and you’re unsure which records or claims matter, call (305) 570-2208 or send the transfers, documents, and job files you have through our contact page.
