Legal Question in Business Law in California

I had a business with a silent partner. The business closed in Nov 2016. He put in $220,000, and now the business closed he wants it all back. During the time of business he received several commission checks. I've been paying him in payments, but he feels it need to be paid in full. I did receive money from the state after i closed, but felt it was mine since he didn't care about the loss of the company. Does he have to right to all his money back or a portion of it?


Asked on 3/31/17, 11:51 am

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

First, I should ask whether the business was really a partnership, or some other form of business organization. Many folks call their business associates partners when they are really co-stockholders or something else. In a windup and dissolution of a partnership, the partnership agreement is controlling but the partnership act provides rules to cover any matters not addressed by a written, oral or implied agreement term. It's hard to imagine a silent partner investing $220K without any kind of understanding re repayment, collateral or something giving him rights to at least some form of repayment in the event business didn't go as planned. Considering the amount of money involved, I would recommend seeing a business lawyer with all documents covering formation of the business and its acceptance of the silent partner's money, I.e., whether he put it in as a loan, as an at-risk investment, or something else.

Read more
Answered on 3/31/17, 12:51 pm


Related Questions & Answers

More Business Law questions and answers in California