Legal Question in Business Law in Virginia

Verbal v. Written Contracts

My husband has entered into a partnership with another individual to open a restaurant franchise. Because the partner has invested approx. $80,000, he is 51% shareholder and my husband is 49% shareholder. My husband invested $10,000 for the franchise fee. My husband (and myself) are active managers of this 2 month old restaurant, whereas the partner is not. However, the partner has made decisions that directly affect the business. Those decisions were never agreed upon. The real issue is that this partnership is verbal. What legal rights does my husband have to rectify this situation? Can this ''partner'' refuse payoff if we find a lending institution willing to provide a loan? Can this partner unwillingly dissolve the partnership, leaving my husband out, even though my husband is responsible for the success of the restaurant?


Asked on 11/08/00, 3:04 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Verbal v. Written Contracts

You need to get the agreement reduced to writing, and you should have a lawyer do it. You should also consider changing the form of business organization to a corporation or limited liability company. It is dangerous to operate a restaurant as a partnership, even with insurance. As you use the word "shareholder", perhaps it is already a corporation and you are just using the term "partner" improperly. In any event, rights to make management decisions, and decisions regarding dissolution, differ depending on the form of organization. You should immediately see a lawyer to help you answer these questions.

Read more
Answered on 11/18/00, 4:00 pm


Related Questions & Answers

More Business Law questions and answers in Virginia