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Jane T (LLC)
Jane T (LLC), Attorney
Category: Business Law
Satisfied Customers: 8435
Experience:  Worked in corporation's law department; business formations, formalities, and other business matters
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Good Afternoon My friend entered into a business partnership

Resolved Question:

Good Afternoon: My friend entered into a business partnership with his niece (a deli) 6 months ago. He's not gotten any compensation and needs to leave. My question is: 'how do you leave a business and get your investment back?'   He plans to leave March 30 but his niece says she may not have the money to repay him before then. Can you tell me what he needs to do to secure his investment?
Submitted: 5 years ago.
Category: Business Law
Expert:  Jane T (LLC) replied 5 years ago.

DearCustomer

 

Is this a partnership, a corporation, or an LLC?

 

Is there a written partnership agreement (for a partnership) or other agreement between the owners which may already cover this?

 

 

Customer: replied 5 years ago.
Great point, I didn't think of that. Yes it is a corporation and there is an agreement. He'll need to check it.
Customer: replied 5 years ago.
<p>Thank you. I need to get more information and may come back.</p><p> </p><p>End of session.</p>
Expert:  Jane T (LLC) replied 5 years ago.

DearCustomer

 

Even if there is an agreement, there are other issues that often come up when corporate owners wish to leave the business. Shareholders (which is what corporation owners are called; partners own "partnerships" - which have different legal implications), even if they have terms regarding how ownership is to be ended, should normally establish a complete contract, written by an attorney in the state where the business and parties are located, that will include full details over payment, when to be made, how to be made, any collateral involved, and interest rates as well as which specifies what is being sold and what is to be paid for that sale. Also, parties should try to remove any liability from themselves for the business. However, if a shareholder has personally guaranteed anything, for example, then just leaving the business, even with a well written sale agreement that says they are not liable for liabilties will not serve to remove them from liability over that guarantee or other obligation because those agreements are with third parties, not the company or its other shareholders. Therefore, selling shareholders who may still be liable for any personal guarantees or promises they may have made will need to find a way to obtain collateral or promises that any payments they may have to make will be returned to them. A complete review of the financials of the business as well as the parties involved, and their assets, can help provide more security and strengthen the protections of the person who wants to be bought out. Language and details are very important in leaving a business or being bought out and this is why professional help is best to obtain.

 

 

 

Jane T (LLC), Attorney
Category: Business Law
Satisfied Customers: 8435
Experience: Worked in corporation's law department; business formations, formalities, and other business matters
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Jane T (LLC)
Jane T (LLC)
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Worked in corporation's law department; business formations, formalities, and other business matters