My brother got a loan from the bank to buy a lawn business. 2 years later he had lost all but a few of his customers. He was going to hang it up, but I told him I would take over and try to revive it. The problem is that he still owes the bank alot of money. I told him I would help with making payments but that I wasn't going to pay off his entire debt, seeing as he let the business go in the first place. I started working under my own business name and picked up new clients. What I got from my brother amounted to 3 clients and his equipment. The question is this: What constitutes his old business? Since I'm using old business equipment am I in effect working under the old business name or my new one?
2 Answers from Attorneys
Re: Lawn business
I would have to evaluate your brothers business records and entity formation to assess your liability.
Was it a personal or corporate loan?
Do you have loan documents?
Have you paid him anything for the remaining customers?
Call or email for assistance.
Re: Lawn business
That would depend on a number of issues. The big issue is what you and your brother agreed to. Are there any sale documents? If so, do they say that you are buying his business or just his business's assets? Is there a separate agreement to assume his business's (or his personal) liabilities? Did you or your brother create an entity?
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