Legal Question in Business Law in Georgia

Legal advice for a business partnership

This year, about a month and a half ago I entered into a partnership with a couple of ex-coworkers that consisted of opening an incorporation in my name and having them foot all the initial bills. I have to run the company and answer all technical questions so this meant that I had to quit my full-time job and they agreed to cover my expenses. They put the business in my name because the company that they work for does something slightly similar and they didn't want to raise any flags and possibly get fired. So just about every peice of paper, every document, etc has my name on it. Instead of the bank account of course. But not they're all of a sudden considering ''getting out'' because of their relationship together along with the costs of the entire product, including paying me is becoming too much apparently. This leaves my high and dry as you may expect, the tech-job industry is not that prominent right now so I cant just up and go find another job. So my question to you is what can I do? Can I possibly sue them? Or can I simply just have the right to take over the business and every service that they've already paid for. Like account setup fee's with different companies? Or can I do both? I look forward to hearing back,Thanks.


Asked on 5/29/03, 6:22 am

3 Answers from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Legal advice for a business partnership

Several issues are raised in your post. The first question is what written agreements do you have with your partners? If there are any, they are a necessary part of these issues. If they agreed to foot some of the bills, or invest additional capital, you may have a claim for that breach, although there may be a problem if they only orally promised to pay your debts. Absent a specific agreement, a person can pull out of a business, though they may be liable for some of the debts incurred to that point if they agreed to pay them. Again, need more specific facts. As for "taking over," who owns the stock of the corporation? Finally, whether their name was on the door or not, if they breached their duty of loyalty, or some other contractual duty, to their current employer, they may very well have a problem there, although that will not help you out. This was a general answer, but it really comes down to the very specific facts and details of your agreements with them.

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Answered on 5/29/03, 6:37 am
Charles W. Field Charles W. Field, Attorney at Law

Re: Legal advice for a business partnership

You may well have a case but your chances of winning will depend on your ability to PROVE the agreements to which you refer. It is impossible to give you a decent assessment in this type of forum. You should seek a consultation with a local attorney who can review the entire situation with you.

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Answered on 5/29/03, 10:48 am
Randall A. Lenz Randall A. Lenz, Atty, CPA

Re: Legal advice for a business partnership

Absent a really well drafted agreement that gives you specific recourse for your partners' breach of the agreement, forget the lawsuit route - you will only spend wasted time and money on a claim that may never be perfected and/or collected. The real issue is - can you make money with the existing corporate set-up and accounts? Your partners want out - accomodate them by buying them out for nominal consideration, but make sure they pay as much of the existing corporate indebtedness as you can negotiate, including accrued compensation for your time and efforts, then run with the business if you can do it. If you believed in this business originally, maybe the reasons for the business are still valid.

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Answered on 5/29/03, 9:38 pm


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