Legal Question in Business Law in California

Re: Business partners tactics

Usually, partners would share profits. I cannot speculate as to what the percentage is between them. If one of the partners is also actively working, he/she may be entitled to draw a salary as well. Without reviewing the partnership agreement, there is no way to tell what their arrangement is as far as compensation for working.

Re: Business partners tactics

Everything depends on the agreement. Is there a written agreement. Please contact my office for consultation and I may be able to help you. Our firm handles cases throughout California.

Re: Business partners tactics

Partnerships are governed not only by the partners' agreement (written, verbal or implied), but by state laws as well. These laws give partners certain rights (e.g., the right to an accounting of profits), regardless of the terms of the partners' agreement.

Many different factors and issues need to be considered before any type of action can be recommended.

Please feel free to call our office for a free initial consultation.

Re: Business partners tactics

As the other attorneys have indicated, the rights and duties of partners are governed by their agreement, and to the extent there is no written, oral or implied agreement as to an aspect of the partnership's affairs, by law.

Unless the partnership agreement provides otherwise, partners are entitled to share the net profits, but not to be paid wages or salaries. However, when the partners do work in the business, it is not uncommon for the agreement to provide for pay in addition to profit-sharing.

My hunch is there is no provision for what you call "overtime" in the agreement. The partner who is taking up the slack due to your husband's absence from work probably feels "morally entitled" to pay himself extra, but there is case law to the effect that this is improper.

Please note that not all two-person partnerships are 50-50. Either the agreement itself or the relative capital contributions of the partners may give rise to other percentage interests, even 99% - 1%.

Finally, are you sure the business is really a general partnership and not a small corporation? Sometimes the owners of a small business will informally refer to themselves as "partners" but they are really the stockholders. The law applicable to the rights of shareholders is significantly different from that applying to partners.

If you feel you should consult a lawyer about this, I am in the same county, and handle business disputes all the time.

Re: Business partners tactics

Contractual agreements generally control partner relations. Therefore, you should consult an attorney and show him the partnership agreement, and/or explain the oral agreement.