Legal Question in Business Law in California

I'm in business with my partner and he now wants to leave the partnership. He plans on starting a new shop but wants to take the business name and equipment. We have been in business just under two years, and have never reported a loss. I am going through medical issues and I am in fear of not just losing the shop but our medical insurance. Is any of this legal, can he take the shop name? Does he have any rights to the equipment, and what about the medical insurance. Where do I stand?


Asked on 6/21/12, 7:29 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The answer is that (a) partnerships are generally based upon agreements, which can be written, oral or merely understandings that can only be understood and enforced based on the actual real-world conduct of the parties, and (b) to the extent the agreement (written, oral, or implied from the facts) doesn't cover a situation, the law will step in and provide terms covering the disputed area.

In real life, you partner is very probably overstepping the bounds of the agreement and/or the law by proceeding, steamroller fashion, to start his own competing business or to Shanghai the assets (including goodwill) of the current business.

No partner owns partnership assets. They belong to the partnership. A partner cannot grab the parthership's name, machinery, customers, goodwill, or whatever. There are ground rules for dissolving a partnership. They don't include allowing one partner to walk away with anything.

Please feel free to contact me directly for additional advice, if needed (no charge).

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Answered on 6/21/12, 8:54 pm


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