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Flewggle
09-09-2014, 10:25 PM
Hi. About 2 years ago I started a side business with my best friend. We've met with some minor success. We've pretty much split up the workload 50/50. We both have other full time jobs and do our side business in our spare time. Lately as our sales have increased my friend is having problems finding the time to keep up his end of production. He has told me he is thinking about paying his step son or his wife to do his end of the work. At the end of the day all of us will be doing the actual work and my business partner will be doing nothing but collecting money. I do have the time and could do more of the work if he cant or doesnt want to do it anymore. Of course I'd want more money. I didnt create our business to work with his step son or wife. I havent talked to him about this as of yet. I dont know what my rights are.

We sell all of our products online. We've never signed any sort of contract. We do have a joint bank account. I've created all the designs and manufacturing processes and built the bulk of the business. He and I split the manufacturing portion. Federal tax I.D. is in my name.

Can he just hire who he wants to do his end of the work and not actually do any work?

taxcpa
09-16-2014, 10:53 AM
If you are a partnership, your partnership agreement governs. If you don't have an agreement or your agreement does not govern hiring of employees than you state likely has a statute that will govern in the absence of an agreement. You will have to look to that.

Also, you need to look at your state's law, but generally you can't be forced into a partnership. A partner can leave, but can NOT substitute someone else without the other partners' consent.

Again, this is a state by state issue so you will have to check with a local lawyer.

I have an article about why it's very important to have written agreements .... this would definitely apply to your situation. http://www.newcompanyinfo.com/when-to-write-it-down

TCI
09-17-2014, 12:15 PM
There are many examples of one partner doing more of the job and getting compensated for it. Before looking at the laws and contracts you should discuss this with your partner openly and see if you could find a solution both can be satisfied. If he is your friend you want to solve any issues amicably. I wouldn't suggest you start talking about contractual or legal rights unless you cannot find a solution. However, there is no harm in finding out what the law says.

SeanCole
11-01-2014, 05:07 AM
There are many examples of one partner doing more of the job and getting compensated for it. Before looking at the laws and contracts you should discuss this with your partner openly and see if you could find a solution both can be satisfied. If he is your friend you want to solve any issues amicably. I wouldn't suggest you start talking about contractual or legal rights unless you cannot find a solution. However, there is no harm in finding out what the law says.

You are really right, you have to discuss with your partner about the legal documents and paper. You to clarify all your business issues before you setup to next business or other business.