Legal Question in Business Law in California

I'm going to assume that you are in a true general partnership so that partnership law applies. Partnerships are formed when two or more persons associate together as co-owners to operate a business for profit, whether there is a written or oral agreement or not, and whether they intend to form a partnership or not - sort of like forming a friendship, it just happens.

If there is an agreement (written, oral, or capable of inference from the partners' conduct), a court would apply the agreement terms, if any apply, to this situation. Most partnership agreements would cover the amount of each partner's investment, and the partners' rights to withdraw their contributed capital (when, how much, etc.).

If there is no agreement, or it isn't detailed enough or clear enough on these matters, a court would apply general partnership law as expressed in the Revised Uniform Partnership Act (RUPA) and case law.

Based on one short sentence of facts, I can only guess how a court would decide this matter. Contributing additional capital over the other partner's objection would probably be deemed okay if the court thought it was reasonable for the partner to do so, in light of the need of the partnership for capital to carry out its objectives. Cost over-runs are a fact of business life. On the other hand, if the additional money was for non-core projects or expansion, the court would be disapproving. Note that a partner who is unhappy with the way things are being run can dissociate and demand to be bought out promptly at the fair value of his interest in the partnership at that time.

However, the matter of withdrawing capital, once invested, is another matter. A partner is not generally entitled to a refund of invested capital, or any part of it (a documented loan to the partnership would be a different matter, but this would require unanimous approval).

Let's hope this partnership has a clear agreement and that good books are being kept. This will reduce the time and cost to wind up the disputes and the business itself, which looks like where you're headed. Let me know if you need representation.