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ddaamodt
02-21-2006, 01:56 AM
I am a 20% owner of a business and my partner owns the other 80%. We each put in an equal amount of time getting the business going. After the first six months my partner opened another business without me and put all of his time into that and pretty much neglected our business leaving me to take care of it. I eventually moved out of town and am no longer putting time into the business. He now feels I shouldn't receive any of the profits as I am not there, although I have not made back any of my initial investment. He says he will pay me back a little at a time, but with no interest. We don't have a formal partnership aggreement other than bank and tax records which show our shares of the business. What can I do, as I don't wish to provide him with an interest free loan for the next year or two.

Morph25
03-19-2006, 10:43 AM
You already know your mistake: " We don't have a formal partnership aggreement". Obviously though, at this point, you just have to make the best of it.

What is difficult to grasp is the following statement: "I am a 20% owner of a business and my partner owns the other 80%.". How is this 80/20 relationship defined?

Without anything formal, the only way forward is negotiation, unless you can both agree on a mediator. The person who least needs the business is often the winner in these scenarios, as they can call the bluff of the other.

It's a difficult situation for sure.

fredkawig
01-24-2014, 06:28 AM
You already know your mistake: " We don't have a formal partnership aggreement". Obviously though, at this point, you just have to make the best of it.

What is difficult to grasp is the following statement: "I am a 20% owner of a business and my partner owns the other 80%.". How is this 80/20 relationship defined?

Without anything formal, the only way forward is negotiation, unless you can both agree on a mediator. The person who least needs the business is often the winner in these scenarios, as they can call the bluff of the other.

It's a difficult situation for sure.

He's correct. Since you have no legal papers and that a partnership agreement and contract is necessary in order for you to claim your share, you can't do anything. You should sue him if he does not give back the 20% capital he owes you. Oral agreements may work depending on the laws that govern your country, if that's the case, you can recover from him.

Auror
01-28-2014, 02:46 AM
You are entitled to receive profits. In a contract of partnership, the partners (both of you) agree to contribute cash, property, and/or services to a common fund with the intention of distributing the profits among themselves. Don't just settle for a return of initial investment. It doesn't matter if you went away or not. You contributed something to the partnership so you are entitled to get something in return. Your money was used so you deserve a share in the profits.

Rainman
01-28-2014, 03:35 AM
Technically you still own 20% of the business. Since your partner is unwilling to either send you part of the profits or pay back the money you put into the business one of the ways to get out of your partnership would be through selling your shares in the business to someone else. Ask your partner one more time if he'll pay back your money in lump-some. If he declines, then use your trump card. Sell your shares. Of course it's not as simple as it sounds but it's worth a shot. OR, if you invested a lot of money [which you don't want to lose] then use an intermediary to sort out your issues. Most law firms offer this service. If that doesn't settle his hash, then go to court.


courts often divide assets and liabilities 50-50 regardless of any disputes. The cost, however can be quite high.

crimsonghost747
01-28-2014, 04:35 AM
Tricky indeed. Gather all the paperwork you can to prove that you actually own 20% of the company... if you have enough to make a legal stand then obviously you are entitled to the money. (either 20% of the profits OR alternatively, which would probably be a better choice: your partner buying your shares from you)

owesem75
01-28-2014, 05:32 AM
I think there is a solution to this in some ways that you could talk between yourselves in order to reach an amicable settlement. I can understand that business is business, but personally, I would also take into consideration the "personal relationship" that you had with your business partner. In this very competitive world, a NETWORK is so valuable more than money as it is more difficult to establish than opening a business.

Grumpster
01-28-2014, 04:45 PM
He's correct. Since you have no legal papers and that a partnership agreement and contract is necessary in order for you to claim your share, you can't do anything. You should sue him if he does not give back the 20% capital he owes you. Oral agreements may work depending on the laws that govern your country, if that's the case, you can recover from him.

You contradicted yourself here, but you make good points. Most developed countries do recognize oral contracts, and quite frequently, especially in a business setting, oral contracts are not usually dismissed by the other party in your matter. Signed contracts are not always a necessity, and quite frequently judgements are made without the presence of physical paper contracts.

As others have said, lawfully you own 20% of that business. 20% of the business shares entitles you to 20% of the profits generated by that company. Your partner has to give you this money. It's the law. If he doesn't want to, then maybe you should start discussions with him about you possibly offering your shares in a sale to him. If he doesn't like the idea or refuses to negotiate with you on the idea, then tell him you are considering selling your shares to a third party - this may force his hand slightly as he realizes he's not going to get away with conning you.

Normal Jim
01-30-2014, 05:06 PM
Honestly, a partnership agreement should have been the first thing you two did. I doubt he will be willing to sign one now, so that makes things very limited. I think you should try sitting down with him and talking. Try to negotiate and hopefully make things better for yourself. Just try not to dig yourself a hole that you cannot get out of.

Musho
02-04-2014, 10:37 PM
Either the percentages have to change or you have to change away from the business. Ownership alone is not enough to keep a market selling their product. Talk to him, and be very assertive, you should get more.

autograph
02-23-2014, 08:12 AM
Your first mistake is not having a formal agreement written on black and white. Even a business set up together will relatives should have its own formal agreement. It does not mean that you do not trust each other, this is simply to prevent any future mischief. You are certainly in quite a bit of a situation, you may not want to go straight to your lawyers. You should try to talk to him nicely and work out a solution that is beneficial for both of you. Of course, both party should compromise. If this fails, I guess you would need to lawyer up and bring this to court.

Ryand88
02-23-2014, 11:41 AM
Damn, always and I mean always get legal agreements, I don't care how well you know someone and how close you are ; you need legally binding contracts to know exactly where you stand if something does happen and it probably will because running a business will be stressful, I think your best bet is to speak to a lawyer and see what you can do with what you have and take it from there.

smbconnect
11-24-2015, 01:17 AM
You can also establish your business with the the help of business consulting firm that suggest you startup idea which provide you better business solution.

vasudigi
04-16-2019, 02:22 AM
The best way is " you have to move away from the business". Because word agreement is not at all legal. Without any document, you are not supposed to get more. So leave this and spend your life in some other business. Be your own boss.

Emily_R
08-14-2019, 09:54 AM
Wow. That is a really tricky situation. Even though you don't have anything "formal" staking your claim to the company, you should still have some way of proving that you have benefited from this business (i.e. any pay you may have received, documents used in the course of business, etc.).

You should maybe even have a discussion with your partner to see if maybe you can settle on an agreement about selling the business since both of you seem like you are ready to move on. If you sell, you may be able to come up with an agreement where you both profit from the ending of the business without having to decide who is going to receive what throughout the life of the business.

AarushiAashi
10-16-2019, 02:08 PM
Picture result for Ending an organization

Section 2 Ending the Business Partnership

Consent to a disintegration arrangement.
Break down the association officially.
Drop Visas.
Pay off obligations.
Get paid.
Reclaim your property.
Record state structures.
Meet with a bookkeeper.

Lilykevin86
02-11-2021, 04:15 AM
In case you're in an association, and need to end the organization, you'll need an agreement. This is regularly called a Partnership Dissolution Agreement.

souza13alex
02-23-2021, 01:22 AM
Try to get quality advice from your lawyer!

lishmaliny
04-07-2021, 06:07 AM
Review Your Partnership Agreement.
Discuss the Decision to Dissolve With Your Partner(s).
File a Dissolution Form.
Notify Others.
Settle and close out all accounts.

Lilykevin86
04-09-2021, 11:44 PM
Consent to a disintegration arrangement. In view of your conversations (or intercession), you and different accomplices should draft and consent to a disintegration arrangement.