Legal Question in Business Law in Massachusetts
I am a partner in very small manufacturing business in MA and we do not have a partnership agreement. I have been notified that my partner wants to dissolve the partnership. Although I was involved in the development of the original manufacturing process and formulations, the division of labor led my partner to develop the formulations used to manufacture additional products for sale. Do I have a right to these formulations? I understand that all cash and tangible assets must be divided between us but how are the intangible assets of the business, such as manufacturing processess, website content, business name, url, customer lists, etc. handled in this situation?
4 Answers from Attorneys
That there is no written partnership agreement is problematic. In the absence of a written agreement, the understanding of the parties controls with a presumption that the assets are to be split 50-50. If you want to discuss further, please call tomorrow morning.
Each partner is entitled to half the assets of the partnership after paying the debts it owes. The formulations are assets and as such one or the other of you can buy the other out of the formulations or they can be sold and the money split between you.
I suggest you contact an attorney ASAP.
The other attorney is right on point here. A review of all facts and a personal consultation is needed. Consult with an attorney in your area for specifics as soon as possible.
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
Franchise Attorney
If handled delicately and well, perhaps something can be voluntarily worked out here as to intangibles, other assets and other separation issues. Without a written operating agreement, you would probably do well to adopt a strategy intended to avoid going to court. Of course, ultimately the might not work, but it is likely worth a carefully-planned try.
Feel free to contact me for consultation if you wish.
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