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  1. #1

    Default How to End a General Partnership

    My question involves business law in the state of: CA

    My business partner and I started up my gourmet horse treats business this past October. I have previously owned this business a few years ago on the East Coast.
    I had/have the vision and ideas, the name of the business, the customer pool, 30 years in the industry and am the sole baker of the product (the treats). I agreed to a partnership because I did not have the start up costs and needed someone to do "back of house" things such as licenses, permits, legal, taxes, etc. He offered to finance the start-up costs and take care of the business end.

    Long story short, he bullied his way and took over many aspects and/or made major decisions without my input. He is now asking me to leave the partnership and wants to buy my half out. I absolutely do not want him to continue the business with my vision. I have a few questions regarding options before I sign any closure documents or receive any money.

    What are the options here on out for both receiving any buyout money or if I refuse it?

    Is there a formula or something to decide the amount of buyout or is it just what he is offering? Is there room for negotiating if it is ridiculously low?

    I have had the recipes for over 10 years. Do I have to relinquish the recipes or is it possible for him to make up his own? I don't know if he has a copy of them. If I do have to relinquish them, how much different do they need to be for my future business?

    Is there a way to guarantee that he will not continue with my vision/ideas?
    Is there possibly a form to sign?
    I am planning on starting up this again myself with a new name as soon as possible.

    I would also like my text on the website to be taken down. (Each treat flavor is inspired by a particular horse and some are my own personally owned. I do not want that up anymore).

    The treats were made at my house. I have used some personal supplies for baking them. I will give him all of the business purchased things of course, does he have a right to ask for/require the personal things I have used as well?

    He is very aggressive during this process and I just do not want to be taken advantage of any further. I want to cut ties and move on as soon as possible with my best interests at heart. I would greatly appreciate any advise you may have!

    Thank you!

  2. #2
    Join Date
    Oct 2014
    Posts
    7,847

    Default Re: How to End a General Partnership

    Any good lawyer would have told you prior to taking on a partner to have a good partnership agreement drafted that details exactly how the partnership will work, how decisions will be made when the partners disagree (which is especially important when the partnership has an even number of partners, all with the same share in the partnership), and how certain situations will be handled, like when one partner gets married, divorced, dies, files bankruptcy, becomes incompetent, wants out of the partnership, can’t keep up with his/her end of the deal, etc. It’s a good idea to consult a business attorney and tax attorney about it for advice on what you ought to put in the agreement and to have the agreement professionally drafted. The little bit of extra time and money it takes to work that out and get a good partnership agreement pays for itself later when something like this happens. If you had a good partnership agreement, it should cover what happens when one partner wants out or the partners agree to dissolve the partnership and go their separate ways. I mention this now in part to give you a heads up on what you need to do should you ever go into business with someone again. Obviously, if you didn't get a good partnership agreement in place already then it is a bit late to fix that now.

    So, do you have a written partnership agreement? If so, does it cover this at all?

    If you don’t have it in writing how this will work, it becomes a lot more muddied. You could dissolve the partnership using the default provisions in the state statutes. But that won’t necessarily guarantee you that you will walk away with the sole rights to the name, trademarks, recipes and ideas you contributed to the partnership.

    You probably should see a business lawyer now to review your options and for help pursuing whichever course of action you decide to take. Without the process spelled out in an agreement this will likely cost you more time and money to resolve this than if you had covered it in a partnership agreement, but if you don’t do that and just let the guy walk all over you the outcome could be even worse.

  3. #3
    Join Date
    Mar 2013
    Posts
    17,788

    Default Re: How to End a General Partnership

    I just do not want to be taken advantage of any further.
    Then you'd better hire yourself a good lawyer.

  4. #4
    Join Date
    May 2017
    Location
    Florida
    Posts
    355

    Default Re: How to End a General Partnership

    Absent a partnership agreement, dissolution and/or dissociation will be governed by California's Uniform Partnership Act (California Code Title 2, Chapter 5). Take a spin through the link below to get a feel for the complexity. That should convince you to take the advice above and see a business lawyer:

    https://leginfo.legislature.ca.gov/f...4.5.&article=5.

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