Legal Question in Business Law in California

Partnership

I've been in a partnership with 2 other people, the company hasn't really taking off, we are still in the concept stage. only 2 of us are on the dba filed with our county recorder. the thrid partner (not on dba) is telling us that he is going to take our ideas and do them on his own. i've talked to the other partner and he has agreed that we need to kick the third partner out. What avenues do we have? can the two partners legally form a LLC without the third partner? what are the legal actions can we take?


Asked on 7/05/04, 3:21 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

Re: Partnership

The two can form a new partnership, as can any group of people. The issue is whether the third partner has a claim on any proprietary ideas or information that the new one would be using. You need to consult with experienced counsel to discuss the facts, and work out a real resolution of the problems before spending time and money on the new partnership. Contact me if interested in doing it right.

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Answered on 7/06/04, 12:25 pm
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Partnership

If you have a written partnership agreement (as anyone starting a business partnership should), then it will explain how and when a partner can be removed. If you don't have a written agreement, then you may have a messy lawsuit in your future.

In addition to removing the third partner, you may need an injunction barring him from capitalizing on the partnership's plans. Alternatively, you may want an agreement requiring him to give you and the other partner a percentage of his earnings for a few years.

Until the third partner is formally removed, setting up an LLC without him will be risky. He could then claim that you are the ones trying to capitalize on the partnership's plans while leaving him out in the cold.

Exactly what kind of relief you can get and how to get it will depend upon specific details of your case. You should consult with a lawyer ASAP.

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Answered on 7/05/04, 3:55 pm


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