Okay, thank you.
Even though you do not have a formal
partnership agreement, an informal partnership
may be assumed then. And if so, then the very same partnership laws apply.
Partners owe each other certain duties in a partnership. These include duty of loyalty, fiduciary duty
, full disclosure
, and acting in the capacity of the business. For an overview, see here
If one feels that the other partner is no longer acting in the best interest of the business, is slacking, and/or is otherwise harming the business, one can initiate a lawsuit to break up the partnership.
If so, then it would be up to the Court
to decide in the end as to what to do and if the claim is valid. If it is, the Judge may:
1) order the business sold and proceeds split;
2) order you to buy him out;
3) have him struck as a partner for little or no money for fraud, gross negligence, or another malicious action/inaction;
4) reduce his capacity to make decisions but have him retain earning rights; and/or
5) whatever else the Court feels is just and equitable.
Unfortunately, it is up to you to initiate this suit. Of course, the other party can simply agree to be bought out, but then, you'd have to come to an agreement in regards to the but-out price.
I hope this helps and clarifies. Good luck.
Please note: I aim to give you genuine
information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.
Gentle Reminder: Please use the REPLY
button to keep chatting, or RATE
my answer when we are finished. Kindly rate my answer as one of the top three faces
and then submit
, as this is how I get credit for my time with you. Rating my answer the bottom two faces does not give me credit and reflects poorly on me, even if my answer is correct.
I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith. (You may always ask follow ups at no charge after rating