Insights · Fiduciary Duties · August 9, 2026

Doing the Heavy Lifting: Breach of Fiduciary Duty in Florida Shareholder and LLC Member Disputes

By Pierce Schultz, Esq.

One of the most important causes of action in Florida shareholder and LLC member disputes is for breach of fiduciary duty. Florida built its corporation and LLC statutes on uniform acts that let a court dissolve a company, or compel a buyout of the petitioning shareholder or LLC member, when those in control of the business act in a manner that is “oppressive.” See MBCA § 14.30(a)(2)(ii); RULLCA § 701(a)(4)(C)(ii). Florida, however, omitted the word “oppressive.” Fla. Stat. §§ 605.0702, 607.1430.

In Florida, fiduciary duties do more of the heavy lifting. So it is worth knowing what the duties are, who owes them to whom, and what wrongs they provide a remedy for.

The core fiduciary duties.

Florida law “recognizes two fundamental fiduciary duties: the duty of care and the duty of loyalty.” Taubenfeld v. Lasko, 324 So. 3d 529, 538 (Fla. 4th DCA 2021).

The duty of loyalty requires fiduciaries to put a beneficiary’s interests ahead of their own. As a result, fiduciaries are generally not allowed to engage in transactions involving conflicts of interest, they must avoid competition with the beneficiary or the beneficiary’s business, they must not take opportunities properly belonging to the beneficiary for themselves, and they must avoid misuse of company property.

The duty of care requires fiduciaries to keep themselves reasonably informed and to act with care. For corporations, that means the care “an ordinary prudent person in a like position would reasonably believe appropriate under similar circumstances.” Fla. Stat. § 607.0830(2). For LLCs, there is a lower floor – the duty of care “is to refrain from engaging in grossly negligent or reckless conduct, willful or intentional misconduct, or a knowing violation of law.” Fla. Stat. § 605.04091(3).

Who owes duties, and to whom.

Most people know that directors and officers of a corporation owe fiduciary duties to the corporation and its shareholders. Fewer know that majority or controlling shareholders owe fiduciary duties to minority shareholders, regardless of whether they hold any office. Orlinsky v. Patraka, 971 So. 2d 796, 801 (Fla. 3d DCA 2007) (“[A]s a majority stockholder, Orlinsky owed a fiduciary duty to Patraka as a minority stockholder.”).

LLCs are somewhat different. Manager-managed LLCs are likely the same as corporations, but in member-managed LLCs, “each member . . . owes fiduciary duties of loyalty and care.” Fla. Stat. § 605.04091(1). In other words, even minority members in member-managed LLCs owe fiduciary duties, akin to a partnership.

Whether fiduciary duties are limited by contract or heightened by law.

It is important to consider whether the applicable fiduciary duties have been limited or heightened. And the answer may depend on whether the entity is a corporation or an LLC.

In corporations, the core fiduciary duties of loyalty and care cannot be fundamentally modified or waived. In LLCs, however, an operating agreement may substantially alter or eliminate very significant aspects of the duties of loyalty and care, as long as “not manifestly unreasonable” and “not authoriz[ing] willful or intentional misconduct or a knowing violation of law.” Fla. Stat. § 605.0105(4)(c). Therefore, if you are dealing with an LLC, it is important to look at the operating agreement to determine whether fiduciary duties have been limited.

Fiduciary duties may also be heightened. Courts in some states have created “heightened” fiduciary duties imposed on controlling shareholders of closely-held corporations, akin to the fiduciary duties owed between partners. Those courts reason that closely-held corporations are similar to partnerships in many ways, and thus ought to be treated similarly. Florida law, however, appears to have rejected the analogy between close corporations and partnerships. See Freedman v. Fox, 67 So. 2d 692, 693 (Fla. 1953). As a result, Florida law likely does not impose such a heightened duty, but the law is not entirely clear. For a fuller discussion of this subject, see my article in The Florida Bar Journal on minority shareholder oppression.

Florida law is even less clear about LLCs. LLCs are a hybrid of corporations and partnerships. Ruggio v. Vining, 755 So. 2d 792, 795 n.2 (Fla. 2d DCA 2000). They are much closer to partnerships than are corporations. The argument that LLCs – at least those without an operating agreement limiting fiduciary duties – ought to be treated as partnerships for purposes of fiduciary duties is much stronger.

What crosses the line.

Although difficult to generalize because of potentially different applicable fiduciary duty standards, certain fact patterns emerge from the caselaw. For example, it is likely a breach of fiduciary duty for a controlling shareholder or LLC member to:

• Cause the corporation or LLC to buy back their own shares or membership units without giving the other shareholders and members an equal opportunity to sell. Tillis v. United Parts, Inc., 395 So. 2d 618, 619-20 (Fla. 5th DCA 1981).
• Cause the corporation or LLC to pay preferential distributions. Alliegro v. Pan American Bank of Miami, 136 So. 2d 656 (Fla. 3d DCA 1962).
• Dilute the minority’s interest on unfair terms. Biltmore Motor Corp. v. Roque, 291 So. 2d 114 (Fla. 3d DCA 1974).
• Take corporate opportunities for themselves. Uvanile v. Denoff, 495 So. 2d 1177, 1179 (Fla. 4th DCA 1986).
• Engage in conflict-of-interest transactions on terms unfair to the corporation. DiSorbo v. American Van Lines, Inc., 354 So. 3d 530, 546 (Fla. 4th DCA 2023); Fla. Stat. §§ 607.0832, 605.04092.

On the other hand, it is likely not a breach of fiduciary duty for a controlling shareholder or LLC member to, without more, do the following:

• Cause the corporation or LLC to fire you as an at-will employee. Orlinsky, 971 So. 2d at 802.
• Sell their interest with a “control premium.” Martin v. Marlin, 529 So. 2d 1174, 1176 (Fla. 3d DCA 1988).
• Make business decisions that turn out poorly. Lake Region Packing Ass’n, Inc. v. Furze, 327 So. 2d 212 (Fla. 1976).

What this means for you.

In shareholder and LLC member disputes, it is imperative that one understand the law on fiduciary duties. However, these cases are usually won on the facts. Consult with your attorney, and based on the applicable law, come up with the strategy early. Collect documents, other information, and admissions before communication shuts down. You will be maximizing your chances of success down the line.

Updated August 26, 2026