Legal Question in Business Law in California

OK, so I have done some research, but just do not know if its correct. I had a silent business partner that invested $210,000 into our recycling company, which closed in Nov. 2016. He received his month percentage of sales and $115,000 back with a total of $173,400. out of the $210,000. Since the business closed, I owe another loan of $22,000, 2 debts totaling $4533.00. He wants his $110,000 since or wants to 1099 me for the full $110,000. He was a silent partner, with no limited partner agreement, since the business went down hill, do to the State, do I still owe him the full $110,000 or a just a silent partner is he responsible for anything? I have never recuperated from losing everything, work 2 jobs and have a family to feed. Do I still owe him $110,000? I did say when we became partners that the only thing that will ruin this program would be the State, and they did, not me.

Asked on 8/10/17, 10:05 am

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

It depends on whether he was truly a partner or he really just loaned you the money. If he was really a partner, any other debts of the business should have been paid before he got his $115,000 back even. If he was a lender, however, then yes, he is entitled to repayment, or to give you a 1099 if he writes off the debt.

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Answered on 8/10/17, 10:28 am

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