Legal Question in Business Law in California
My partner wants out and all his money back!!
I own a small business, and have a limited partner. We agreed to terms from quicken software, no attorney. He wants out and all of his money back. 20000 AND 2 credit cards. I dont have the money. And no where in our agreement does it say you get you investement back. It says if you want to leave then you can have the current value of your share. What can i do to protect myself. He wanted to sue and try to take the business away. Does he have the right to dictate how things go?
4 Answers from Attorneys
Re: My partner wants out and all his money back!!
Does he have the right to dictate how things go?
NO, he does not. Must follow the agreement. He may be able to force sale of business, in that you may want to purchase it from him for its current value as stated in the agreement.
J. Selik
800-894-2889
www.4thelaw.com
Re: My partner wants out and all his money back!!
The agreement dictates terms of how the partnership is to be terminated, not his whim. If he sues, he will probably lose. If your contract calls for attorney fees, he could be liable for yours.
Re: My partner wants out and all his money back!!
If you and your partner have a agreement and the terms of the agreement specifically prohobit or do not allow the recovery of investment, then he is out of luck.
However, this does not prevent him from trying to bully his way into court to obtain his investment. In such circumstance, you would be required to answer to his complaint.
You may want to looking into have a letter prepared and mailed to your partner re-addressing the terms of the contract and that his attempt to file suit would be frivilous and futile.
Due to the fact that someone has taken the step of hiring an attorney, letters written by an attorney are taken more seriously than by a non-attorney.
Please feel free to call or shoot me an e-mail if I can be of any further assistance.
Re: My partner wants out and all his money back!!
Your view of the law is more nearly correct than the other partner's.
A first step here would be to verify that you have set up the limited partnership correctly, and that the proper filings were made with the Secretary of State.
Handling the affairs of a limited partnership does not necessarily require an attorney, but you should use one unless you are very sophisticated and have lots of experience.
This is probably a good time for you to retain the services of a business lawyer. Giving you proper advice depends upon knowing all the potential grounds the limited partner may have for withdrawing, and for bringing suit. You may have more exposure than evident from the mere fact of his wanting to withdraw.
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