Legal Question in Business Law in California

Re: Business

The short answer: Probably yes. The more specific answer depends on the facts and circumstances unique to your partnership and exactly what your partner has been doing or not doing. I think what you're impliedly asking is whether or not it is going to be worth your time and money to consult with an attorney about this problem. Yes, once an attorney has more information, he/she should be able to help you determine the best strategy to deal with this problem. These types of situations have a way of getting worse rather than better and so I would recommend that you don't put it off. Another option may be a mediator that can help you and your partner work out your differences. This is often a low-cost option separately or in conjunction with legal counsel. The Better Business Bureau offices in some communities provides mediation as do various other programs.

Re: Business

First, in a strict technical sense, one can't be in a partnership without an agreement. What you mean, of course, is that you don't have an express written agreement. Maybe you don't even have an express oral agreement. However, the facts and circumstances of being partners and operating a business together will give rise to an implied contract (or "contract implied in fact"). If your dispute went to court, the judge would apply partnership law to the realities of how you and the other guy were running the business and tell you what your rights and remedies were, based partly on implied contract (your conduct) and partly on statute (the Revised Uniform Partnership Act).

Among the more important implied-contract terms the court would want to figure out are (1) whether this was a 50-50 partnership or not; the presumption is 50-50 but a contrary intent can be shown by unequal capital contributions and/or unequal participation in day-to-day operations; (2) whether this is an at-will partnership or a partnership for a definite term or a specific project (such as developing particular real property); and (3) whether there are any practices showing agreement on financial matters such as salaries and division of profits and losses. The partnership books will be a major factual indicator of items (1) and (3); the partnership's actual business operations and third-party dealings will give clues to what the deal is re #2.

I suggest that you get ahold of California's current enactment of the Revised Uniform Partnership Act (RUPA). It is found at Corporations Code sections 16100 to 16917. It's too long to quote here, but the provisions are not too technical for the average business person to read and understand. Look in particular at the provisions re dissolution, winding up, continuation after withdrawal of a partner, relations between partners, etc.

Re: Business

Sure. Discuss the problem, make your demand, settle up and one of you pay the other for the agreed amount of value of your interest in the company. Then prepare a contract and waivers for that. If the business has substantial value, you'll probably have difficulty reaching agreement, but could bring in appraisers and attorneys to help.

You could also end up suing each other, but that is generally not efficient.