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    Probems with buisness Partner
    I am new here and have posted elsewhere on this subject so here are the details.

    I have been a business owner for over 25 years in an S corp.

    Over the last few years I have been running the day to day operations by myself while my business partner who started the company and is the President works from home (I'm not sure what he is doing there since he rarely communicates with me)

    His girlfriend was taking care of the taxes and accounting issues but to to her ill health I am not sure if she is capable of working on anything. (She lives with him)

    I have warned him many times about notices from the state and IRS about unpaid taxes but little has been done.

    After these unheeded warnings numerous levies have been made from our bank account which has left us with little money in order to fulfill orders that have been pre-paid. As a result more customers cannot trust us are are no longer ordering from us as a result.

    He claims to have contacted another accountant and the IRS about this but has been elusive about the nature of the conversations.

    I am planning to leave the company and the partnership and am concerned about liabilities from customers initiating lawsuits due to unfulfilled orders.

    In short I can no longer carry the day to day burden of the business let alone continue in a frustrating business partnership with a man who is apparently is taking advantage of me.

    More details will follow.

    Any advice?


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  2. Collapse Details
    Quote Originally Posted by Hamburgerhelper View Post
    I am new here and have posted elsewhere on this subject so here are the details.

    I have been a business owner for over 25 years in an S corp.

    Over the last few years I have been running the day to day operations by myself while my business partner who started the company and is the President works from home (I'm not sure what he is doing there since he rarely communicates with me)

    His girlfriend was taking care of the taxes and accounting issues but to to her ill health I am not sure if she is capable of working on anything. (She lives with him)

    I have warned him many times about notices from the state and IRS about unpaid taxes but little has been done.

    After these unheeded warnings numerous levies have been made from our bank account which has left us with little money in order to fulfill orders that have been pre-paid. As a result more customers cannot trust us are are no longer ordering from us as a result.

    He claims to have contacted another accountant and the IRS about this but has been elusive about the nature of the conversations.

    I am planning to leave the company and the partnership and am concerned about liabilities from customers initiating lawsuits due to unfulfilled orders.

    In short I can no longer carry the day to day burden of the business let alone continue in a frustrating business partnership with a man who is apparently is taking advantage of me.

    More details will follow.

    Any advice?

    Hamburgerhelper,

    Consult your business attorney! There are several variables that could either help you or hurt you. What you can and can't do depends on the bylaws of the corporation and/or what you're able to negotiate with your business partner. What is your role and ownership in the corporation?


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    Theresa Nguyen J.D. LL.M. Taxation
    Founding Member
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  3. Collapse Details
    I've heard this expression once before:

    "The only ship that won't sail is a partnership."

    There's some truth to that.


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    #4
    Join Date
    May 2017
    Location
    London, E14 8RJ United Kingdom
    Posts
    67
    Fist of all are you having the partnership forms and the company you own legal information and collect the data about it when his girlfriend was paying taxes and when she skipped from doing her part of job. Now, visit a business partnership attorney who is well acquainted of giving you a right decision and after consulting from all of them. Finally make a decision. All the best! Hope you make a right choice!


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    I'm also 50/50 partners with somebody in a business where I'm the intellectual property?

    I don't wish this situation on anybody and will be the first admit that I created a big mess for myself. So I run a web design business with my brother. We're 50/50 partners cause for some stupid reason eleven years ago when I didn't even have a few thousand to my name, he put up the cash to get the business off the ground by giving me the money I needed to register a domain, start up a website, buy some computers, etc. He spent about $5K in total and the business now does over a $1/m per year.

    The problem is he doesn't know the first thing about web design or even computers. and in those eleven years even teaching him to type was a struggle. He was working as a cook previously before any of this started and now he just handles administrative work like ordering supplies and paying bills because I think of much else he can do and almost anything else seems beyond his capabilities.

    I pretty much have been the company's only marketing strategist, content specialist, head developer, main editor, you name it since day one. I really didn't think this business would blow up like it has and the whole 50/50 partner thing went from a necessity to a burden. I been thinking a lot about what happens if I just loose it one day and we decide we can't work together? Or what if I get hit by a bus? Now his attorney wants me to sign an agreement that if one of us gets killed or quits, the business is worth whatever millions and either of us would have to pay off the other or pay back their spouse that value. Now we could also put this burden in the form of an insurance policy and let the corporation pay on it and that policy would handle the buy outs or whatever. With that setup, I wouldn't be on the fence for the money if he died or vice versa. The problem with that is it also forces me to commit to a contract and if I wanted to leave, with that paperwork signed, we would have to discuss a buyout and I know he would demand equal share which for me wouldn't be worth it. Am I better off not signing anything and trapping myself into a commitment?

    I think it's best we both get our own individual life insurance policies to protect our families and as much as this contract helps me, it hurts him. Has anybody else been in this same boat? Any advice?


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    I'm in a 50/50 partnership where it's more like 90/10 and I'm 90! I run a website design firm and borrowed $5K from a family member eleven years ago for some equipment, etc. Now it does like $1m+ per year. He previously worked in a kitchen, not the slightly clue about this stuff. I tried to find a job for him, had him do customer support and administrative work like paying bills. I'm pretty much our only designer, developer, marketing strategist, you name it. So I been thinking I get hit by a bus tomorrow, what happens. His wife gets half? His wife wakes over who knows less than he does. If he does, I hate to say but I think I would hire a secretary. If I die, I give the business a month (maybe two). So his attorneys want me to sign an agreement saying the company is worth this this much and his spouse could get so much. Right now I have nothing signed, so I could walk away on the day I loose it and start up another corporation and let the old one die off. Most of my clients know me by name, not by the business. BUT that signed agreement, according to my attorney, says that it legally binds me to the business and if one day I want to quit, I have to discuss a buyout which we would never come to terms on. I'm wondering if it's better for me to ride this company out with no agreements in place and take that risk vs further trapping me in this business venture.


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