I started an S corporation with a partner a year ago. Upon entering the partnership, it was undertood that we were 50/50 partners and equally guaranteed a 5 year retail lease. We also split workload.
Six months into business, my partner moved out of state and her husbands business that guaranteed the lease no longer exists. My boyfriend's company is still the main guarantor for the next four years, even if we liquidate. Subleasing the space may be a hardship.
We are currently trying to end our partnership. My partner is essentially forcing me to liquidate. Given that she moved out of state and left the business in my hands and that they can no longer guarantee the lease, can we claim that she ''abandoned'' the corporation or in some way shirked her responsibilities in terms of the 50/50 partnership?
I would like to keep the business going and have offered to pay existing debts and we would be solely liable for lease, which we are any way, given they can no longer quarantee the lease.
1 Answer from Attorneys
Re: Corporate Abandonment
First, a corporation is not a partnership and therefore to force a liquidation you both would have to agree or one of you go to court and seek an order of liquidation.
Second, if the lease is in the corporations name, you do not have to terminate the lease. If it is in both you and your partners name that is something different. just because your friend/partner moved out of state does not mean the guarantee or responsibility has ended.
I would suggest you contact an attorney as soon as possible. Take your lease, the guarantees and your corporate documents.
You could buy her out for $1.00 and a holdharmless on the lease and any other debts of the business, if she agrees.
Please feel free to call me without obligation to discuss this matter.