Legal Question in Business Law in California

Re: trminating a business partner

It depends how the business is organized. If you and her skimped on legal advice, you may now be paying the price, as you may be in a default general partnership, and she may be correct. Without more information, no attorney could say for sure. You should retain a business attorney to review your situation and advise you of your position and options accordingly. Expect to pay around $250 an hour, although I charge a little less.

Re: trminating a business partner

If it is a partnership, there is a fairly cut-and-dried set of rules by which a court handles the failure or break-up.

First, to a very large extent, any agreement between the partners will be enforced. The agreement doesn't have to be written. Indeed, the court can enforce even a tacit agreement in addition to express agreements, written and/or oral.

Next, to the extent the parties express or implied agreement doesn't cover a situation, the court will apply the statutory rules found in the California Uniform Partnership Act of 1994 (UPA), found in the Corporations Code as sections 16100 to 16807. Major sections of the UPA deal with dissolution, wind-up of the partnership affairs, rightful and wrongful withdrawal of a partner, valuation, buy-out, continuation of the partnership business after withdrawal of less than all partners, and so on.

What is likely to happen if this goes to trial is that the court will order the valuation of the interest of your now former partner as of the time she withdrew by abandoning the business, and require you to pay her off. She would probably NOT be allowed to have a part of the business itself, just money. Further, her share of the business at the time she split presumably wasn't worth much. Also, her share may be diminished even further if her withdrawal was wrongful and caused harm to you or the business.

So, while I do recommend that you see a business lawyer if the business is worth anything (and it sounds as though it is), I think you have little to fear by going to court and having a judge decide the matter. One outcome that won't happen is the court requiring the two of you to stay in business with each other involuntarily. Partnerships are always "at will," even though a partner's withdrawal can be wrongful (as perhaps here).

Re: trminating a business partner

You need to retain a business lawyer with experience in "business divorces" quickly. How you move forward with your business will depend on the form of the business itself (i.e., partnership, limited liability company, corporation), the terms of your agreement with your "partner" and the documentation of that agreement. (Is it in writing?), and the financial stake each of you have in the business. There are also practical considerations to review (what assets does the business have? In the event of a business divorce, could you or your partner pick up the business under a new entity? Would you wind up as competitors for existing clients/customers? Once you retained an attorney and have given him/her all of the pertinent information and your objectives, he/she can provide you with and help you implement a plan of action.

Re: trminating a business partner

You need to retain a business lawyer with experience in "business divorces" quickly. How you move forward with your business will depend on the form of the business itself (i.e., partnership, limited liability company, corporation), the terms of your agreement with your "partner" and the documentation of that agreement. (Is it in writing?), and the financial stake each of you have in the business. There are also practical considerations to review (what assets does the business have? In the event of a business divorce, could you or your partner pick up the business under a new entity? Would you wind up as competitors for existing clients/customers? Once you retained an attorney and have given him/her all of the pertinent information and your objectives, he/she can provide you with and help you implement a plan of action.

Re: trminating a business partner

You need to retain a business lawyer with experience in "business divorces" quickly. How you move forward with your business will depend on the form of the business itself (i.e., partnership, limited liability company, corporation), the terms of your agreement with your "partner" and the documentation of that agreement. (Is it in writing?), and the financial stake each of you have in the business. There are also practical considerations to review (what assets does the business have? In the event of a business divorce, could you or your partner pick up the business under a new entity? Would you wind up as competitors for existing clients/customers? Once you retained an attorney and have given him/her all of the pertinent information and your objectives, he/she can provide you with and help you implement a plan of action.