Legal Question in Business Law in California

I think you, the prospective partner, and the business itself would be better off if you worked as an employee rather than as a partner until your Ch. 13 is discharged and/or the business fails for whatever reason. In general, the bankruptcy of a partner causes a dissociation of the partner from the partnership when it happens during the course of the partnership, but I do not know whether a pending Ch. 13 proceeding prevents the debtor from becoming a partner or forming a new partnership. In any case, I'd advise you to take a conservative approach and not become a partner right now. Perhaps you could make an agreement that would allow you to become a partner upon discharge from BK, perferably at your option, as part of your consideration for working for the business. Also, make sure your trustee knows and approves.

You may want to re-post this question under bankruptcy law. That way it will reach more attorneys with the relevant expertise. (I don't have such expertise myself so I can't assess Mr. Whipple's answer. I think very highly of his abilities, but other lawyers might see your situation differently. Re-posting the question might result in a second opinion.)

I thought of another possible factor. When a person goes into bankruptcy, all their property ceases to be theirs, and becomes the property of their "bankruptcy estate" under the control of the trustee, not the debtor. The impact is that a bankrupt individual probably has nothing to invest in the partnership - neither property nor money - and this might make it difficult to put the partnership together. Of course, personal services might be contributed, but in any event I believe the whole concept needs to be disclosed to and discussed with the trustee. A non-equity, employment-type participation in the proposed business remains, in my view, a preferable approach until the BK is discharged and you are back handling your own affairs.