Thank you. The interest of your partner is a marital asset but that doesn't make her a managing partner of this business. You need to get a written partnership agreement with your partner that spells out exactly how the partnership is going to be run.... who can make major and minor decisions; what happens if additional money is needed,; what happens if someone doesn't do contribute their share; what happens in the event of death, divorce, bankruptcy, etc.; what voting percentage is needed to sell the business; your buy/sell arrangements if someone wants out. As part of this, your spouse's should not be involved in the management or control....although they may own an interest as marital property, they cannot and should not be involved in the management. The spouses need to sign this partnership agreement to acknowledge not only this, but the death and divorce provisions.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
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The partnership is 50/50. Since I am having issues with the wife now can the business partnership agreement just be signed between me and my partner?
I wish I could provide you with one, but that is beyond the scope of what we are allowed to do on JustAnswer. If you have particular questions, however, that come up with regard to particular clauses, I will be happy to guide you through those. You can probably find a template to go by on the internet through a site such as legalzoom.com.
I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
I was able to download a sample partnership agreement I just need your help to insert a particular clause that "spouses are not allowed to meddle in running the business and partners has the right to implement rules & regulations in the business. Please see attached:
This PARTNERSHIP AGREEMENT is made on ____________, 20__ between __________________________________________ and __________________________________________.
1. NAME AND BUSINESS. The parties hereby form a partnership under the name of __________________________________________ to conduct a __________________________________________. The principal office of the business shall be in _______________________.
2. TERM. The partnership shall begin on ________________, 20____, and shall continue until terminated as herein provided.
3. CAPITAL. The capital of the partnership shall be contributed in cash by the partners as follows: A separate capital account shall be maintained for each partner. Neither partner shall withdraw any part of his capital account. Upon the demand of either partner, the capital accounts of the partners shall be maintained at all times in the proportions in which the partners share in the profits and losses of the partnership.
4. PROFIT AND LOSS. The net profits of the partnership shall be divided equally between the partners and the net losses shall be borne equally by them. A separate income account shall be maintained for each partner. Partnership profits and losses shall be charged or credited to the separate income account of each partner. If a partner has no credit balance in his income account, losses shall be charged to his capital account.
5. SALARIES AND DRAWINGS. Neither partner shall receive any salary for services rendered to the partnership. Each partner may, from time to time, withdraw the credit balance in his income account.
6. INTEREST. No interest shall be paid on the initial contributions to the capital of the partnership or on any subsequent contributions of capital.
7. MANAGEMENT DUTIES AND RESTRICTIONS. The partners shall have equal rights in the management of the partnership business, and each partner shall devote his entire time to the conduct of the business. Without the consent of the other partner neither partner shall on behalf of the partnership borrow or lend money, or make, deliver, or accept any commercial paper, or execute any mortgage, security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract to sell any property for or of the partnership other than the type of property bought and sold in the regular course of its business.
8. BANKING. All funds of the partnership shall be deposited in its name in such checking account or accounts as shall be designated by the partners. All withdrawals are to be made upon checks signed by either partner.
9. BOOKS. The partnership books shall be maintained at the principal office of the partnership, and each partner shall at all times have access thereto. The books shall be kept on a fiscal year basis, commencing _____________________ and ending _____________________, and shall be closed and balanced at the end of each fiscal year. An audit shall be made as of the closing date.
10. VOLUNTARY TERMINATION. The partnership may be dissolved at any time by agreement of the partners, in which event the partners shall proceed with reasonable promptness to liquidate the business of the partnership. The partnership name shall be sold with the other assets of the business. The assets of the partnership business shall be used and distributed in the following order: (a) to pay or provide for the payment of all partnership liabilities and liquidating expenses and obligations; (b) to equalize the income accounts of the partners; (c) to discharge the balance of the income accounts of the partners; (d) to equalize the capital accounts of the partners; and (e) to discharge the balance of the capital accounts of the partners.
11. DEATH. Upon the death of either partner, the surviving partner shall have the right either to purchase the interest of the decedent in the partnership or to terminate and liquidate the partnership business. If the surviving partner elects to purchase the decedent's interest, he shall serve notice in writing of such election, within three months after the death of the decedent, upon the executor or administrator of the decedent, or, if at the time of such election no legal representative has been appointed, upon any one of the known legal heirs of the decedent at the last-known address of such heir. (a) If the surviving partner elects to purchase the interest of the decedent in the partnership, the purchase price shall be equal to the decedent's capital account as at the date of his death plus the decedent's income account as at the end of the prior fiscal year, increased by his share of partnership profits or decreased by his share of partnership losses for the period from the beginning of the fiscal year in which his death occurred until the end of the calendar month in which his death occurred, and decreased by withdrawals charged to his income account during such period. No allowance shall be made for goodwill, trade name, patents, or other intangible assets, except as those assets have been reflected on the partnership books immediately prior to the decedent's death; but the survivor shall nevertheless be entitled to use the trade name of the partnership. (b) Except as herein otherwise stated, the procedure as to liquidation and distribution of the assets of the partnership business shall be the same as stated in paragraph 10 with reference to voluntary termination.
12. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.
Executed this ______________ day of _________________, 20_____ in _____________________ [city], _____________________ [state].
In paragraph 7, insert the following..."Both Partners acknowledge and agree that: i) the only partners who shall have any management control in the Partnership are ______________ and _______________, and ii) that in the event either or both Partners are married, that the spouse of such Partner(s) shall have no managerial or voting control in the Partnership."
That should do it! :) You take care!
I am sorry for asking you so many questions but hopefully this will be the last.....
Does this clause cover the issues that I as a partner has the right to implement the rules and regulations such as: who are allowed to answer the phone, who are allowed to go in and out of areas restrcited for employees only.
No problem. Happy to help you out! If you wanted to make things crystal clear, you could expand it to read as follows:
"Both Partners acknowledge and agree that: i) the only partners who shall have any management control in the Partnership are ______________ and _______________, ii) in the event either or both Partners are married, that the spouse of such Partner(s) shall have no managerial or voting control in the Partnership; iii) with respect to the foregoing, neither Partner shall allow his or her spouse to work at the Partnership in any capacity, whether as an employee, consultant, agent, contractor, or otherwise."
How's that? :)
when you said "otherwise", what covers that? Because the wife is not working with us the thing that gets to my nerve is she just grab any thing that she wants, she goes to areas where only employees are allowed.
To be honest she is most welcome to come to the place what really not acceptable to me is when she said that she can do whatever she wants to do in the business because she is the wife. This is where I want to shut her off.
If there is a particular thing you don't want her to do, you can add that specifically to the clause, but if you go to too much of an extreme, you are going to risk alienating your partner. I think the clause covers anything you are going to be worried about, because with no official capacity, she clearly cannot do "whatever she wants." You might want to specifically add a couple of things..."that a spouse shall not be allowed to intervere with employees or the Partnership's operations in any way and that the property of the Partnership belongs to the Partnership and is to be used exclusively for the operations of the Partnership and shall not be for the personal use of the Partners or their spouses."
I have answered now a series of 8 of your questions. I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
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