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Thank you for your question. It is always a pleasure to help a fellow professional. As you well know, if you need or require additional explanations, please do not hesitate to press 'reply' and I will be here to help out.To respond to your question directly, there is no legal ability to walk away' from your interest. If you are listed as partner, you remain liable and you remain the agent for the business even if you no longer wish to do so. There are two options here, you can either try to transfer your interest to an another by filing Articles of Amendment in your state or pursuing a dissolution. A dissolution can be obtained via court order, and in your case if the other partner ran the business while you acted more-or-less as the silent partner, there is a viable option also for a suit against your sister for 'breach of fiduciary duty', since by walking away she would have breached her obligation to the business and also to the partners, i.e. you. If she refuses to buy you out, you can consider filing for bankruptcy on a business level, or as I mentioned, transfer your interest to someone else, potentially a stranger, and have the person take over the business and the profits. While you cannot sell without her approval, you may be able to transfer your personal interest to someone else if the Statement of Partnership does not negate such an option, as that is what I was referencing.Good luck.
Thank you for your follow-up, Randall.Yep, I think I have assisted also. In case a partnership makes no limitations on your rights, that means that you are free to transfer your partnership to someone else. A partnership is a bit funny as a business structure since a transfer of your ownership to someone else automatically dissolves the partnership and then either requires the existing partners to re-partner up, or separate, so in that sense transferring your interest to an another could be a good way of splitting the business if she is unwilling to help out.As for what I stated, I am afraid that is somewhat vice versa--any transfer you make MUST be for some valuable consideration (money) for it to be valid. It can be for $1, but it must nominally be for some sort of a mutual exchange. It also can be to anyone, including family, so long as that individual or individuals are of legal age and are willing to take over your interest in the business. So it may be someone who you have a personal relationship with, I simply stated that it may be 'potentially' a stranger, or it could be someone with whom you have some manner of an existing relationship.You CAN serve her at her last-known address, or serve her agent if she has one, or serve someone with whom she lives with--all of those are valid. If you attempt to serve her at her last-known address but she fails to get the documentation, she could later contest the hearing but please know that as an agent of the business, you CAN serve her at the business address since she is still the face and representative of the business, and her failure to pick up the documents would not negate your ability in pursuing this further.Good luck.
O.K........so, what is the legal relationship of whoever I sell this to with her since they have no recorded agreement? What, if anything can she do so far as interfering with the person I transfer this to in running the business? I have several persons who might be interested, but I need to be able to tell them what the "deal" is here. And my landlord has given me pretty much "carte blanche" to walk away or go month to month on rent or even offered to sell me the building with nothing down and finance it for 30 years at 7% interest. I suspect they might be willing to add a person or substitute in a new owner as well.
My residential landlord is an attorney and when he gets back from vacation I will run this by him as well.
Good job! Anything else you can add would be appreciated here.
Randall,Legally once you 'sell' or 'transfer' your interest to someone else, both of the partners would have a 50% interest in the business although the partnership itself would be dissolved once you transfer your interest. In essence both would own a half of the whole business but separately rather than as partners. She cannot interfere with the transfer since your partnership agreement did not grant her (or you) the right of first refusal, meaning the right to contest the sale or transfer, or a right to veto the transfer. Please be sure to run this by your landlord by asking him to put his 'lawyer' hat on--I am positive that he will agree with my evaluation. Honestly I am not sure what else you may need to know, but I will be here if you think of something that you feel I did not touch upon. Good luck
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