Legal Question in Business Law in Virginia

partner buy out

I recently had a falling out with a guy whom at one time was my legal business partner. We converted the company from a partnership to a sole proprietorship in my name with both the cities we were doing business in. We converted when we were hitting road blocks because my partner had bad credit. Since then his investment vs my investment is about 75/25 and operational things were not working out between us. I offered him his portion of his investment back which I itemized on paper from documented receipts we had plus his estimated time performing actual work. He wasn�t happy with my decision but ended up taking the money and leaving when I offered it to him. We have no signed partnership agreements and he signed the paperwork with both cities dissolving the partnership. He was under the assumption that we would become 50/50 partners again when our investments matched. That is obviously never going to happen and never was. Now he is saying that I will be hearing from his lawyer. Does he have any sort of case?


Asked on 11/26/08, 3:09 pm

2 Answers from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

Re: partner buy out

How so (and on what basis)?

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Answered on 11/26/08, 11:41 pm
Jonathon Moseley Moseley & Associates Law Firm

Re: partner buy out

I think that all of the legal issues and your questions, at least so far, will turn on exactly what was said in the paperwork where you "converted" the company from a sole proprietorship. Normally, once a partnership is created each partner has an equal share in all aspects of the partnership, including profits, business opportunities, and even debts and liabilities. To end this relationship, especially for a company that still continues apart from the partnership, would have to be done just right. What exactly it said is essential. And then whether it can be modified verbally is important. Note that it is not necessary to have a signed or written partnership agreement to be in a partnership. It may be hard to prove sometimes, but if 2 people agree verbally, it can be a partnership. It is also important if there were any hints at a different, future relationship.

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Answered on 11/26/08, 11:59 pm


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