Legal Question in Business Law in California

Re: Partnership

I don't see how selling your interest in the troublesome partnership can solve your problem. Why not simply liquidate the troublesome partnership and move on? A subterfuge, in any case, will not look good in a trial, if it comes to litigation.

Re: Partnership

Bad situations sometimes get worse, I'm sorry I practice business law dealt with partnerships for over 30 years in the San Francisco Bay Area. No two were like and it seems that when they go bad they go even worse in the2000s than they did back in the 1970s. I need to ask an I'm sure that there isn't any but is there a written agreement??? Rhetorical of course. Don't sell anything, don't buy anything all of you, excluding the one whom you do not wish to have in the partnership, should seek the aid of a good business attorney. One who is dealt with partnerships in their breakup in the past. My advice is looking for a solution to the problem not a lawsuit. The problem is that many times when in a lawsuit unless people can hopefully divorce themselves from extreme emotions and become "reasonable". A good attorney can save you many thousands of dollars in litigation fees as well as emotional stress, worse than what you're going through now. There are so many ramifications to the situation to the point that sometimes the business cannot be continued on in the future and there are problems with continuing in the same trade, with the same customers because of unfair competition as between the parties. At worst, the court will make the final decision is to the split up, the values in the requirements placed on all parties. Hopefully again, everyone can be "reasonable". It is interesting to you purchased the equipment in your own name. I don't understand why but that has a significant effect depending upon what kind of equipment is its, and how is used in the business. Basically, get thee to an attorney, yesterday. Again I'm in the San Francisco Bay Area if you wish to consult with me, I am at 925 -- 945 -- 6000. By the way feudal like the advice of one lawyer see the advice of another but do not look for lawyer that is going to give you the answer you want to hear versus the realistic answer.

Re: Partnership

A partner in a general partnership can withdraw at any time. It is accomplished by notifying at least one other partner, preferably in writing, of the withdrawal, much as one would do when resigning from employment.

A withdrawal can be rightful or wrongful. It is wrongful when the act of withdrawing violates some contract, such as (but not necessarily) the partnership agreement itself. A partner's promise not to withdraw can be inferred from a partnership agreement to remain partners for a specific period of time, or until a particular project is completed. However, most withdrawals are rightful.

A partner cannot be prevented from withdrawing wrongfully, but either the partnership or any of the remaining partners can sue for damages.

The withdrawal of a partner begins the process of ending the partnership, which is usually discussed as a three-step process: dissolution, winding up, and termination.

When a partner withdraws, the partnership is dissolved. Unless the partnership agreement provides otherwise, the dissolution is followed by a period of winding up, in which its affairs are shut down, preferably in an orderly way, by collecting its receivables, liquidating its assets, and paying its bills. The winding-up can be done by any partner who did not wrongfully withdraw. Net remaining assets are distributed to the (former) partners in proportion to their capital accounts. When the winding up is complete, the partnership is considered terminated.

Rather than wind up and terminate, a dissolved partnership's business can be continued by the non-withdrawing partners by buying out the withdrawn partner (or his estate, if the "withdrawal" was caused by his death).

In your case, what does your partnership agreement say about withdrawal, about capital contributions in general, and, in particular, what does it say with respect to the partnership's use of YOUR equipment? Was it leased, rented, or loaned without rent? Do you have the right to reclaim it, or would your taking your equipment back be contrary to any express or implied contract? Can the other partners assert (in court) that what you say is your property is really your contribution to partnership capital, and hence equitably belongs to the partnership?

You need to have your documentation and your legal position checked by an attorney who knows partnership law very well before you attempt to withdraw, either by taking yourself OR the equipment out of the partnership.