Legal Question in Business Law in Texas

one partner put in the money the other only time

one partner put all of the money into a small business they both put time into it. the partner who put in the money is moving and offered the other to buy him out.they want to pay him for the amount that he has in it, with a payment plan. they have taken all of the receipts and want to claim everything on their taxes plus sell equipment that was given to the partner with the money. they also want him to sign everything over before they make any payments.everything has the partner with the money's name on it and then below is the other partners name. what rights do they have since they have not put 50% into this business neither with money or effort. is it legally fair for them to want to pay only what the other partner put in since they have not put in any money? would it be fair for us to offer them what we have put into this business with an 8% interest and due date? they are saying that if we do not sign everything over to them now (before they have made any payments) that they will ''wash their hands of the business and walk out''. if they do that would we owe them anything other than for the time they put in? since they have not put up any money do they have the same rights as we do? who's side would the law be on?

thank you


Asked on 11/30/05, 12:27 am

1 Answer from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: one partner put in the money the other only time

Apparently there is no written partnership agreement. So the law requires the partnership to be dissolved, the business liquidated (everything turned to cash), and all the debts paid off. If there's not enough to pay off all the debts, both partners are liable for the money owed.

If all the debts are paid and there's money left, each partner gets their capital back, and if there's still money left, then that's divided 50/50.

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Answered on 11/30/05, 9:12 am


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