Legal Question in Business Law in California

Re: business partnership

If you can't agree, filing court action for partition and sale is your option. Feel free to contact me for the legal help you'll need in trying to negotiate resolution, or filing.

Re: business partnership

A partition proceeding can indeed be used in a partnership dissolution case to divide partnership assets if a court finds the process is suitable under the circumstances (see Code of Civil Procedure section 872.730), but the effect is likely to be to destroy the partnership's business in the process.

A partner can be expelled from a general partnership against her will by means and under the circumstances set forth in the Revised Uniform Partnership Act, which is codified as Corporations Code sections 16100 et seq. In particular, Corps. Code section 16601, subparts (3) through (7) address conditions under which a partner may be expelled. Note that you can't usually just vote someone out as a partner. However, a court can order the expulsion of a partner for good cause, but just the fact that the partners don't like her or there is a difference of opinion on a lot of things is generally not going to be good cause.

If a partner leaves, voluntarily or involuntarily, the usual process is that the partnership buys out her interest. The amount can be decided by negotiation, or failing that, by procedures set forth in the Act, which can mean coming up with a bundle of cash.

Occasionally, there will be something in the partnership's written agreement that provides an easier alternative. Another possibility may be for the partnership to dissolve and go out of business, pay its creditors and divide its remaining net assets according to law and accounting principles.