Legal Question in Business Law in California

Ill try and keep this short. My wife bought a BBQ trailer in Dec 2006. In January 2007 I decided to start a mobile BBQ catering service with a partner. As a partner, we both were to invest $5000 each. We had a partnership agreement drawn up and signed in May 2007. Long story short, the partner only invested $2000 in 4 years and in 2010 I decided to quit the partnership and start my own S Corp. Is it legal for my wife to sell the BBQ that's in her name to my corporation since she was no part of the partnership and I fell the BBQ is her's and not the part of the partnership agreement.


Asked on 2/17/11, 8:20 am

1 Answer from Attorneys
Aaron Feldman Feldman Law Group

Does the written partnership agreement that was signed in 2007 specify how the partnership termination is supposed to be done? Does it specify assets? Was the trailer part of your $5,000 investment? Sounds like the trailer never belonged to the partnership, but was just a loan from your wife. That being said, if the termination is not handled properly, the fact that you are now opening a competing business might possibly create a problem since you owe your partner a fiduciary duty. If I were you I would want a written termination agreement of some sort confirming the termination so that your partner cannot claim lack of knowledge. You really should meet with an attorney who will be able to look at the documents and give you more specific advice.

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Answered on 2/17/11, 8:35 am


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