Legal Question in Business Law in California

Re: personal property with a business partner

Not as a community interest, which is only created in a marital relationship. You may be subjected to what has been dubbed a "Marvin Claim." After the actor, Lee Marvin, who was sued by Michelle Triola for enforcement of an oral promise based upon a close personal relationship. This situation certainly appears ripe for this sort of claim.

Re: personal property with a business partner

Here we go again, I assume there's nothing in writing between you and your fiance as to the business, capitalization of the business (paying for things in where the money comes from/who is responsible) or any division of the business if there is a problem between you and she. This all really should have been in writing to save potential problems in the future like the ones you anticipate. The answer the question you're asking will depend upon numbers of factors. What if anything did you promised her and what if anything did she do in relation to the promise. I can't answer the question fully here because there are too many factors. Simply speaking I anticipate that she will claim an interest in the business even though you paid for everything. That does not mean that she actually has an interest in the business and it will depend upon what you and she will ultimately agreed upon or what a court will do after lawsuits filed based upon the facts presented. That really isn't an answer the you want to hear I'm sure but it's the only answer I can give you in this situation. Why did I say here we go again, well after 30 years in practice in one way or another I've seen this situation numerous times, each one being different in each one having a different set of facts and circumstances. I am in Northern California in the San Francisco Bay Area and if you wish to consult with the mine phone numbers 925 -- 945 -- 6000.

Re: personal property with a business partner

It sounds to me she may have right to some equity in business. What was your agreement, what promises made, expectations. Where payment for business expenses come from. Many questions to be answered. CAll to discuss 800-685-6950

Re: personal property with a business partner

If this went to court, the first legal question a judge would have to decide is whether you and your fiancee were really in a business partnership or whether it was your business and she was only an employee. The answer depends upon whether she was to receive a share of the profits, or merely get regular pay. From the facts you gave, it seems likely this was a partnership. It is not necessary to have a written agreement in order for a partnership to exist. All it takes is two or more people in business together with a plan or expectation to share the profits.

When one partner pulls out of a partnership (unless an agreement provides otherwise) the partnership ends, the partner who did not withdraw may wind up the business and divide the money, or that remaining partner may buy out the withdrawing partner and continue the business.

You and your former partner should try to decide what her share of the business is, and what that share is worth, and you then buy her out, without going through a legal battle with lawyers and lawsuits. If that doesn't work, you could suggest binding arbitration. Any of this would cost you both less in the long run.

Ordinarily, neither partner is entitled to wages for services to the partnership, and each is liable to creditors of the partnership. This is different from the employer-employee situation.

Based on your substantial contributions, I'm pretty sure your share of the partnership is well over 50%. I think you will need (legally) to pay your ex-partner something, but not necessarily the value of her services, nor half of what the business is worth.

Whatever you agree upon, put it is writing.