Legal Question in Business Law in Michigan

Business partners and responsibilities

We sold our business recently. There are 4 partners in our business and we have agreed to keep track of equal participation and used schedules to do that. However, 1 partner used to come in earlier than the schedule and logged in more hours over the last 6 months and did not participate in any management tasks at all. So the remaining partners together matched him for his hours (all our hours totals combined together matched 3 times his hours, we mean) and 3 of us took pay for those extra hours spent on management tasks at the rate predetermined at the formation of the business. All this was in our agreements when we formed the partnership. Does the 4th partner have a case, if he goes to court?


Asked on 5/30/03, 11:16 am

1 Answer from Attorneys
Regina Mullen Legal Data Services, PLC

Re: Business partners and responsibilities

You should consult an attorney and a CPA. The attorney to tell you if your "hour matching" plan was legal under your agreement, because it looks like a plan to reduce his partnership share artificially. The CPA will be able to tell you if the valuation of your managment time was properly accounted for, --if the agreement is silent, one has to wonder why all of you increased your hours to exactly match his actually worked contribution, and whether that made plausible business sense.

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Answered on 5/30/03, 6:55 pm


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