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Legal Ease
Legal Ease, Lawyer
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Im in a recent partnership of two months with one other person

Customer Question

I'm in a recent partnership of two months with one other person operating a landscaping business. Lately we haven't been getting along and I've offered to tidy up the finances and then leave the partnership. In the present absence of a partnership agreement, what are my options for getting out of the partnership while allowing the remaining partner to continue the business? The other partner wishes to continue the business. Thanks in advance.
Submitted: 1 year ago.
Category: Canada Law
Expert:  Legal Ease replied 1 year ago.
Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

Finally, as we go through the process please do not feel rushed if I ask you a question. You are always free to take your time to gather more information before you post back. As well, please understand that even after you rate me the post will not lock and you could always come back for further clarification if you think of something a bit later on down the road.

Is your partner agreeable for you to leave?

Are there debts?

Are any in your name?

Did you invest anything in this partnership?

You are not incorporated are you?
Customer: replied 1 year ago.

Hello Debra,


Thanks for responding to my concerns. With respect to your questions,


 


1. Yes, my partner is agreeable for me to leave.


 


2. We are in the process of calculating the balance. As we are a two month old company with very low overhead, we are roughly breaking even. I would estimate that we could not be in debt by anything over $500.


 


3. There is no debt specifically in my name or in my partner's name.


 


4. As I am the only one with a credit card, I have invested about $600 in mostly service fees for setting up the partnership, WSIB, some tools and office supplies. I would like this amount returned at some point.


 


5. We are a general partnership in the province of Ontario registered since May 03, 2013.


 


I would like to leave because my partner has little business experience and is not open to my own experience (I have started two sole proprietorships, one of which is on-going). The partnership is also being run as a cooperative (this is the end goal) with the other workers however my own liabilities as a partner are not understood or ignored. I am the only one with any assets (I have a house).


 


This is a painting, landscaping, cleaning business with about $6,000 in business for June, and another $6,000 for July. While the business is good, there are concerns about running the business. I want to leave cleanly while allowing the business to continue in the same name. I'm hoping for a step by step process of ending the partnership, and removing my name from the CRA/HST, and WSIB obligations (they will be paid before I leave except for year end taxes).


 


Thanks in advance.

Expert:  Legal Ease replied 1 year ago.
Essentially you would want an agreement signed by your partner to indemnify you for all debts incurred now or in the future.

You would want your name removed from all literature, invoices etc because you don't want to be sued if the partnership is sued.

But you need an agreement that if you are the partner will pay whatever a Court orders you to pay.

You will need to send in a change of information for the CRA and WSIB and be sure to remove your credit card information from every organization that has it including any stores for supplies.

If you had insurance you should also let them know but perhaps your insurance should be maintained for a while? This is something to ask the broker.

Does that help?
Customer: replied 1 year ago.

What about the change from partnership to sole proprietorship? What is needed for this process? Does the registry need any agreement about the change of ownership to allow this change?


 


Thanks again!

Expert:  Legal Ease replied 1 year ago.
This would be done by a change of information submission that you would both sign.
Legal Ease, Lawyer
Category: Canada Law
Satisfied Customers: 86880
Experience: Lawyer
Legal Ease and other Canada Law Specialists are ready to help you
Customer: replied 1 year ago.

Can you please clarify the staement you made earlier?


"


But you need an agreement that if you are the partner will pay whatever a Court orders you to pay."


 

Expert:  Legal Ease replied 1 year ago.
Sorry.

There was a typo.

You need an agreement that says if you are held liable then your partner pay you for whatever the Court says you are liable for.
Expert:  Legal Ease replied 1 year ago.
Thanks very much for the rating.

Please take the time to participate in the customer satisfaction survey as that will go into my record with the site.You will be sent an email with the survey in a couple of days.

And feel free to keep my name in case you need me again down the road. You can always put my name into the subject line the next time you post so that your question will stand out for me and I will answer it just as soon as I can.

Thanks and take good care!
Customer: replied 1 year ago.

Thanks Debra Thal, your answers were very helpful and clear.

Expert:  Legal Ease replied 1 year ago.
Thanks for letting me know!

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