Legal Question in Business Law in California

Re: withdrawn or removed partnership

When you say that your sister and her friend had a "partnership," I am assuming that you mean that they had some agreement between themselves only(written or otherwise), and not that they formed a legal entity known as a "partnership." If this is the case, you need to be mindful of how the sole proprietorship is licensed with the city and how the d.b.a. (fictitious business name) is filed with the county. Beyond that, all leases, bank accounts and credit cards should be reviewed to determine in whose name (either or both of them) the leases, accounts and cards are held. If they are both signatories (responsible by their signatures) upon anyone of these, the balances will likely have to be satisfied before your sister is no longer responsible for charges, loans or rent, absent some unusual accommodation from the lender or landlord.

Re: withdrawn or removed partnership

You're not likely to get lenders to let her off the hook; she will remain liable for any loans she signed, unless the lenders accept some kind of guarantee by the remaining partner. That can be negotiated with them. As to her 'partner', a proper release agreement will prevent and handle any disputes between them. Feel free to contact me if you want legal help with the negotiations or documents.