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  1. #1
    Join Date
    Jan 2010
    Posts
    1

    Default Business Partner Problems

    My question involves business law in the state of: Iowa

    A friend of mine and I hated our jobs and wanted to start our own business. (Automotive Repair Shop)

    We had talked about it, we both didn't have money and we just were performing side jobs to help people. I became very serious as I had told my fiancee from day one that I had known her I wanted to start my own shop. So the three of us set in motion, starting this business. My fiancee has been the sole provider for financing. She and I have filled out all the necessary paperwork for state, city, parts houses, bank. Anything you can think of we needed, we applied. I was able to rent space from a friend of mine who was currently in a shop. We weren't up and running but my job was becoming increasingly unhealthy for me to stay. I quit with the acceptance of my fiancee in order to get the shop cleaned up and ready, as well as to meet with any managers or business people to finish our accounts.

    It has been about 3 months. My friend and partner hated his job and somehow quit/got fired. He came here and we have slowly tried to build business. When he ran out of money he demanded that we pay him. Now my fiancee is going to school for business administration and is very good at managing money. She always pays bills when due and is very good at keeping track. She had paid $900 in bills that month. Leaving us with a small amount in the bank, but we had no debt. He demanded that he be paid, no one had authorized to pay the credit card. (of which I applied for his name is not on nor is on the bank account) He stated that no bills can be paid until he is paid first (according to he and his friends who are business professionals)
    I told him if he were an employee yes I would have to pay him, but he is a part owner. He complains but gets money in order to pay some bills. He comes back again needing money. My fiancee and I reluctantly give him approx. $100-$150. Another week, he needs more money. Again just a small amount and we tell him thats it. Antoher week and he takes $50 from the cash box without telling anyone. He defaults on a tool account which he bought on credit a scan tool that is very important for business. The business has paid to buy extra programs on. So I reluctantly let him pay the bill up to date on the business credit with his understanding that he pay it back. I also contact the company and explain to them that their tool vendor was not stopping by in order to take payments (of which he had no money anyway) but they send someone out and fix his credit (for being late payment)

    He has not paid me back. He has asked me to float the bill after he gave me a specific day. He has filed for unemployment and is getting money from that. Which pays all his bills. He also came at me thinking when we started that He and I were 50/50 and that my fiancee had nothing to do with the business. I asked him if he signed the certificate of organization with me and my fiancee. He says yes, I told him and explained to him that we are all 33/33/33. He continues more fights and has sat yelling at me that everything is B/S and that we cant do this. I explain to him that nothing has been kept from him. We show him the finances, where money is being spent, whats going on. He wants his name on the bank account. But he has said numerous times he will take money out when wants and do with it what he wants. He has put no money in to this venture. But wants half of everything. He has finally agreed to back down, but I am afraid of what he will do in the future. He has no money in his personal and is wanting the business to pay his bills. With this economy and starting a business. Its going to be a year or two before we can pay ourselves decent to live. I dont understand why he doesnt get it. There is numerous reasons I dont think he should be apart of this anymore.

    His agressive behavior including threatening legal action and calling my fiancee and threatening if she doesnt give him money or else he's leaving.

    He brings his kids here who sit in the office, throw screwdrivers at the ceiling. Chuck ice outside and rocks too. He thinks its funny and doesnt discipline them. He has to leave all the time to take them, which leaves me working on cars by myself.

    He owes the business atleast $350 if not more. He's taken money without anyone's knowledge. He has no car insurance and said if he got in an accident he would just say he was driving around for the business. So that way the business would cover it. HOW WRONG IS THAT!? I can't have this.

    seeing as we have $1000 in the bank. 33% is $333 approx, can I just tell him I dont think its going to work out. You owe this amount which is more than whats in the account, if you leave we will consider it even.

    He's my friend but this is business. Sorry this was very long and drawn out.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Business Partner Problems

    This is an incorporated business? LLC or Corporation? A partnership? Or what? Does the ownership agreement he signed have a provision for getting rid of an unwanted partner/member/shareholder?

    You may have to dissolve this business and start a new one without him; how complicated that will be under the circumstances is not something I can tell you, as I know virtually nothing about the organization of the business or its assets.

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