Legal Question in Business Law in New York

i really need help with my shop

i own fifty percent of a dog and cat grooming shop. I want to sell my half and my partner is arguing with me about it and giving me a hard time. She claims that when i either sell my half or we sell the whole business that she wont sell the file box of our clients. Which to me are the stores clients now. Also she claims that the clients are hers. Ive been told that i can sell my share for however much i feel needed. Is this true? Weve been open for 8 months. She is also saying that she doesnt have to give me anything for my half if she chooses not to. There is nothing written on paper nor a verbal agreement about how much we would sell for. I put in six thousand dollars and she also put in the same H


Asked on 8/17/07, 9:11 pm

2 Answers from Attorneys
Christopher Hoyt The Law Offices of Christopher W. Hoyt

Re: i really need help with my shop

You have a number of potential issues here. I would recommend you speak with a business attorney familiar with these types of transactions to determine what rights you have in this situation. I would need additional information to be able to adequately review with you your rights. Please feel free to contact my office if we may be of any assistance.

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Answered on 8/17/07, 9:29 pm
Nancy Delain Delain Law Office, PLLC

Re: i really need help with my shop

A fifty-fifty business ownership situation. Who let you do that?????????

Since your business is in the absolutely horrid position of having two equal partners at loggerheads, there are a really only two things you can do.

1. Hire a lawyer. Then set up a time when you and your partner will sit down with a mediator and discuss your differences and try to come to some agreement. Include a tie-breaking method for future disagreements in your agreement. Write your agreement down and both sign it. This may well be your best option.

2. Hire a lawyer. Then sue your partner for judicial dissolution of the business and ask the judge for an equitable distribution of the client base. With a court ordering equitable distribution within a certain time of the client database, your partner would have to share or face a contempt charge.

As to whether you can sell your shares outside of the partnership, technically yes, it may well be true that you can (the absolute answer is based in your shareholders' agreement), but for all practical purposes you really can't. The first problem you would face is the Securities and Exchange Commission (SEC) regulators; when you get into selling corporate stock in a closely held company like yours to an outside party, the SEC gets all in a twist so, although it can be done, the sale has to be done correctly and carefully (hire a business lawyer who knows something about antitrust and small business dealings). Your second problem is finding a buyer, and there I wish you good luck; I doubt there's much market for a 50% share of an 8-month old company with a partner who isn't playing nice.

You can absolutely offer to sell your partner your shares for a fair price, but she does not have to purchase them.

Good luck. Please contact me if you need my help with any of this.

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Answered on 8/18/07, 12:10 pm


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