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    Partnership gone bad, now I want out...what do I do??
    I have a business that the partnership has gone sour. We our not communicating anymore. I have moved away from the business cause of family reasons but I still own it. My partner is handling all the operation for the business now. Now I WANT OUT of the business. Our assets total is about 200k...the land is still under lease and also some of the equipment through a bank. The past 4 years we both have not paid ourselves anything cause we've reinvested our profits back to the company. The business is still operating today.

    I'm not sure what I need to do to get out of the business? What do I say to the bank that gave me the loan to do my business? Do I just go up to them and say I'm not part of this business anymore and they need to take my name off? Do I need to file anything like partnership dissolution or something or tax papers? Also I was wondering now that I want out do my partner have to BUY me out? If so how much do I get out of it??
    We both put in the same amount of money and time into the business and under our partnership agreement it's 50/50..

    NOT SURE WHAT TO DO PLEASE HELP ANYONE.....THANK YOU...

    JOE


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    Do you have a shotgun agreement? If you do, offer your partner to buy you out and if he/she doesn't accept you will have to buy your partner out for that price. If you don't have a shotgun agreement and there is no communication your company will go belly up eventually if you let it continue. There may be a legal way of enforcing a shotgun type agreement but I am not sure exactly. The money you profit that went back into the business is something you agreed upon at that time and has no bearing on what happens now.

    As for the bank that will depend on what your contract states. Does the company owe the money? Is it incorporated? Was there a personal guarentee on the money? Read through your contract it should say something about that.

    If the bank gave the money directly to the company and the company is incorporated you are not personally liable for it, unless it states in the contract "personal guarentee". If the bank gave the money directly to you and you used that to start the business then there may be a personal guarentee on it.

    If I was you I would make an offer for your partner to buy you out. If he/she is still running the business they obviosly want to keep it. That is why shotgun agreements are good sometimes. In your situation it would end it quickly, without it, it will get sour so bad that the company will just get hurt and everything will be lost. I have seen that happen before.


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    Re: Partnership gone bad, now I want out...what do I do??
    what is a shotgun agreement and where might I find some examples of partnership agreement papers? Thank you.


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    Re: Partnership gone bad, now I want out...what do I do??
    A shotgun agreement is like this:

    Parter A wants out the business. Partner B and Partner A are fighting. Partner A offers X dollars for Partner B to buy out Partner A. B has 30 days to buy out A, if B cant come up with the money or refuses too. A has to buy out B for that amount and B is legally obligated to accept. So there is a resolution within 30 days and no more fighting and damage of the business.

    Each agreement can have differences .. it's something you write up extra with a partnership.


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    If you don't have a shotgun agreement, or if neither partner can raise the money to buy the other one out, you will have to try to sell your 50% to someone else, or agree with your partner that the entire business be put up for sale. Alternatively, you might agree to close the whole thing down, but if it's running well that would seem like a big waste for both partners, plus you have bank loans to pay back and a lease obligation.

    Using a business broker (there are lots of them listed online, or look for one in your city or state) can be a good option for selling a stake in - or all of - your company.

    As a side note, 50/50 partnerships can be problematic in many situations, including your current one, simply because there is no majority partner. You both start off with good intentions and seeing more or less eye to eye, then things change and because you're equal partners you find yourselves in a stalemate.


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    I agree with bigal. I would definitely see if your partner would buy you out of your part of the business. If he is still operating it, he must want to keep it. There is no guarantee that you will get 1/2 of the money put into it, considering that you are no longer operating the business, but he is. He might want to take you to court if your relationship is that bad. I would consider finding an attorney if your partner gives you any trouble about wanting out of the business.

    If you have any loans or debts, that is an issue as well. Taking your name off of those isn't easy unless he assumes liability of the debt. The loans would have to be paid before you get any money either.


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    Just tell your partner that you want out. There's no point wasting your time with a business that you want no part of. Separating the business shouldn't be too hard. You are not helping yourself by waiting around and avoiding the inevitable.


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    If the law of your country where do you reside is strong then partnership is not an issue. But anyways, just let me know that if the business is still being operated then what is the turnover of profit and total sales or selling? I can arrange arbitrators with investment for your business.
    What your stock broker doesn't want you to see


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    Last edited by stockbroker_s; 09-03-2014 at 02:10 PM.
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    Directly informing that you want out from business is a right choice. But not at the initial stages give time for yourself because when you disclose the present scenario to the banks and the organization which has granted you loan earlier, they might take immediate and embarrassing actions. Discuss with your partner and then dissolute partnership. I would also suggest that you seal legal counsel.


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    lets settle everything with your partener and then end the deails with him and find any new one.
    thats best for you


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