Legal Question in Business Law in Arizona

If I form a partership with another individual and we do not have a wrtten agreement. We have a verbal agreement to split profits 50/50, then at the end of the partnership the other partner says they want me to buy them out (give them more profits). I have put in 81% of the Capital and they have put in 19%, what is the recourse? Do we split it 50/50 just on verbal, or percentage wise based on the interests? How would a judge decide if there even was a verbal agreement?


Asked on 10/31/09, 11:14 pm

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

If you do not have a written agreement, then it is up to the moving party to prove in court what the agreement was among the parties. The court will not write the agreement for you. Just because you contributed more of the capital does not mean that you get more of the profits. The proof arises out of business records, and the history of the business relationship and the events that have occurred.

If you have not entered into business, your question demonstrates why you need to retain legal counsel and why you should have a written agreement with your partner. The more successful the business, the more you need written agreements among the partners. You can still put a written agreement in place, even though you have already been in business.

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Answered on 11/06/09, 5:12 pm


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