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Hi, my name isXXXXX going to try and help.
So this is a 4 way partnership? Is the salon and boutique the same store? Is the business registered with the state?
And what state is the business in?
Are you having problems with the website?
Ok. What state are you in?
Selling an interest in a partnership is different than dissolving a business. Is the business registered witht the state?
Are you there?
Having problems with the site?
As far as the lease goes, you can ask the landlord for early termination or early buyout. If the landlord is not budging on a buyout or early termination, you could just walk away from the lease, but if you do that, the tenant who signed the lease (your mom) and any guarantor would be liable for the rent for the rest of the lease or until the landlord finds a new tenant. This isn't quite as bad as it sounds because the law imposes upon landlords a duty to mitigate damages. That means your landlord can't just sit back and collect your rent but has an affirmative obligation to try to find another tenant to lease your place. If the new tenant pays the same or higher rent, you're off the hook. If the new tenant pays less rent than required by the lease, however, your landlord will claim you owe the difference over the term of the lease and you'll be forced to pay it.
But what if your landlord isn't all that motivated to find a new tenant? Since you're still liable on the lease, there's no real benefit to them to put out any extra effort to find another tenant. In that case, you'd want to try to locate a new tenant yourself to assume the lease obligations. To prepare for this situation, your lease should contain a provision that says your landlord can't unreasonably refuse to consent to a new tenant. This means that if you present a new tenant who's financially sound and experienced, your landlord can't arbitrarily refuse to sublease to the new tenant.
Commercial leases do not get the same protection as residential leases. Check the lease for early termination clauses too.
As far as the business is concerned, a simple contract is all you need to tranfer ownership. You can write it on a napkin. A simple sales contract. Then the buying partner can dissolve the business entity and reorganize. Otherwise, if you dissolve the business now, you would get your half of the value and the partner would need to reestablish a nes business entity to continue the same business.
At this point, I would suggest a simple sales contract for your partner to purchase your interest in the business.
Any questions Shelly?
Here is a link to the CA secratary of state information for converting business entities to a new business entity.
If you are jsut selling your interest in a partnership, I dont think any conversion is needed.
Not neccessary, but would help you sleep better at night if the lease ever defaults.
Anything else I can help with?
Did the two of you have a written partnership agreement intitially?
Let me know if youre still there or else Im just waiting around for you respond.
Yeah, if you search for "buy-sell" agreements, you can find genaric contracts.
No problem, just wasnt sure if there was a tech problem or not.
Just google. I dont have any made already.
Here is a decent sample.
Is there anything else I can do for you?
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Hi sorry I had to do some hair.
IM still wondering how it works If we end up accepting payments from them. There must be a special contract for this as well. Thanks
Yes...its alled a buy-sell agreement. Usually they are in place when you start the partnership.
Under the circumstances, it can be as complicated or simple as you want. If you trust your partner, you can technically do it with a hand shake or something as simple as writting a contract on a napkin. Point is, it is probably best to put something in writing talking about how much you will get paid for what.
oh no, we definitely want it in writing as this is not ending warm and fuzzy and I want it done legally so we can do something if they stop paying! So...would this be the same as the "buy sell agreement"? We are splitting because I dont want to be partners with her anymore! sort of like a divorce:) That being said would still like it simple, so if we could do everything on one contract that would be great.
Is this possible? buy sell/ disolve all in one?
You can do it all. You either sell your interest or disolve the business. You can sell your interest, let the new owner convert the sole proprietorship to a new business entity. Or you can both dissolve now. And let her start a new business. Doent make sense to buy sell and dissolve all together.
If the business is going to end, think dissolution. If its going to keep going, think conversion. And its best jsut to sell your interest and let the new owner reorganize. In which case I would recommend an LLC. You can direct the new owner to me by putting To Bart at the begining of thier questions.
I have in reference to my partner buying me out and if we are going to carry the balance
how does the interest rate work? How do you know how much interst to charge.
Is this considered a business loan. I am not a bank yet they want to take 5 years to
pay us for our half.
Basically, you would be giving them a loan. You can negotiate the interest rate. Personally, I think you would be better off getting a bank involved and having them get a secured loan. If you agree to a sale with time tabled payout, the company could file bankruptcy and you lose out. Even a loan not personally guaranteed by the new owner would put you at risk of not getting paid in the event of dissolution.
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