Legal Question in Business Law in Arkansas

Dissolving a business partnership

My husband entered into a partnership 3 years ago to start a ag related business. My husband had 25+ years experience in the ag business having worked for his father's ag store for years. His name is very well known in the community among farmers and he is recognized as an ''expert'' in the field. The individual he went into partnership with had no experience to speak of and had only lived in the area for a short time. As a result, none of the farmers (potential customers) knew him. In a rural area, this is vital. He did however, provide start up money of $25,000. The new business's name was in my husbands name due to it being a recognizable name in our small town. Over the last 3 years, my husband has been responsible for 99% of the revenue coming in. His partner does a little paperwork and that is all. My husband is tired of carrying him as they both get paid the same amount. He wants out and offered to assume the debts, or let his partner assume debts, or sell and split. His partner refuses to leave, but he won't buy my husband out. He knows he could not keep the business running himself as he really knows nothing about it. All assets and debts are in both of their names. What are our options?


Asked on 9/27/06, 8:55 am

1 Answer from Attorneys
Alan Crone Crone & McEvoy, PLC

Re: Dissolving a business partnership

The good news is you have a lot of options. One set of important facts is the extent to which your husband and his partner have their partnership in writing, whether the business is incorporated or a limited liability company or some other form of formal organization, whether their are other oral or written agreements between the parties. Those factors and many others will determine how you proceed. I call these cases business divorces and they can be just as messy as a divorce involving a marriage.

One option is to judicially dissolve the business and "wind up" its affairs. You can do this several ways and do it in a way that does not disrupt the company's business operations. Your husband should only do that if the other party will not do anything by agreement. The threat of court action, might get the other fellow to see reason.

This is a very complex matter and there are many legal issues to consider. You should see an experienced attorney to help you.

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Answered on 9/27/06, 9:39 am


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