Legal Question in Business Law in California

My wife has been in a partnership for 6 years with another woman in a salon. The partner has lied and has been sneaky throughtout the entire partnership. The lease on the salon runs out March 15th. My wife has explained that she does not want to continue with the partnership. She has the salon appraised at $ 25,000.00 her partner agreed to this amount. The partnership also has built up money in the account. The partnership is stressed and bitter and my my fears the partner will not live up to her part of the bargain. My wife has to get set up somewhere else and only has two months. Fearing she won't get her money, or her partner will do what she can to hold back payment, my wife took 1/2 of the money in the account as her half of the partnership and took an additional $ 12,500.00 as 1/2 buy out for her share. She wrote her partner a letter documenting everything that she did, down to the penny, and gave it to her this morning. Her partner says she had no right, says she wants her out of the salon now, went and told everyone in the salon that my wife took out all the money and she was going to get a lawyer and sue my wife.

Does she have a case?


Asked on 1/17/12, 12:33 pm

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Yes, the partner has a good case!

Partnership property, including cash and bank accounts, doesn't belong to the partners in equal shares. It belongs to the partnership, 100%. Neither partner has a right to take partnership assets, not even their proportionate shares (except. of course, as provided in the partnership agreement or by law).

There is a legal process for withdrawing from a partnership and for dissolving the partnership when it is down to one person (and hence ceases to be an operating partnership). The process for withdrawal (dissociation), dissolution, winding up and termination of a California partnership is set forth in the Corporation Code (which contains California's Revised Uniform Partnership Act) as its sections 16601 through 16807.

I recommend that she avoid spending any of that partnership money. At some point, whatever is left after payment of partnership liabilities will be divided between the former partners, but until then the funds simply don't belong to your wife.

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Answered on 1/17/12, 1:44 pm
Terry A. Nelson Nelson & Lawless

It is time for your wife to finally seek some legal advice and assistance, before she causes herself any further problems. If serious about doing so, feel free to contact me for help in trying to resolve this situation without criminal charges being filed against your wife, and before the partner files the lawsuit.

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Answered on 1/17/12, 4:07 pm


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