Legal Question in Business Law in Arizona

Re: Partnership Problem

Without knowing the financial scale of the partnership's operations, the character of the partner, or much else, I can only make general observations about your situation. These are as follows:

(1) It is risky to leave the management of a partnership, especially one that is to be wound up, in the hands of the other partner. The extent of the risk depends on the moral character of the other partner and what kind of hot water the partnership's business may fall into.

(2) Winding up and dissolution of a partnership requires as much care, cooperation and caution as forming one in the first place, and sometimes more.

(3) In general, outsiders (non-partners) can look to either or both (or all) partners for satisfaction of partnership debts, regardless of who signed or who has become a non-participant.

(4) However, as between partners, your rights and liabilities including the right to reimbursement will depend on your agreement. To the extent the partnership agreement is not in writing, a court will tend to enforce oral agreements, informal understandings, and past practices on the theory that they are evidence of the parties' agreement on those points. Finally, the court would invoke the provisions of the state's uniform partnership act.

If your exposure is potentially more than a couple thousand bucks, you should have at least an 'initial free consultation' with a lawyer that specializes in business matters.