Legal Question in Business Law in California
I have a partnership agreement between three individuls that are split 60/20/20, I am one of the partners with 20%. This is for a small homecare agency that was entered into on May 12,2011. It was initially agreed by all the partners that I would be the only one earning a salary and now they want to take that away from me. How can I stop this from happening?
2 Answers from Attorneys
Either by agreement among the parties, or by suing for breach of contract. If serious about hiring counsel to help in this, feel free to contact me.
Partners often don't receive compensation (such as wages or salary) for services provided to the partnership. They take out a share of profits instead. Corporations Code section 16401(h) (part of the Revised Uniform Partnership Act, which governs California partnerships) says "A partner is not entitled to remunderation for services performed for the partnership....." Nevertheless, it is not uncommon for partnership agreements to modify this rule and call for pay for one or more partners for their services as partnership employees. Against this background, you need to decide whether you should hold your partners' feet to the fire by bringing suit to enforce the agreement to pay you, or to accept the modification -- of course, if you are not being paid to work as agreed, you may also decide not to work as agreed. It's hard to say what's "right" for the partnership and for you without more facts. Maybe the proposed business doesn't look as lucrative now as it first did, or the initial expenses may be higher than planned.
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