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Richard, Attorney
Category: Business Law
Satisfied Customers: 55595
Experience:  32 years of experience practicing law and a businessman.
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Hi Im a partner in a company without a partnership agreement.

Resolved Question:

Hi I'm a partner in a company without a partnership agreement and no money asked to invest from my side. Over time, discussions were held and a partnership agreement was drafted as there requests to induct 2 more foreign partners. Several ones were drafted but some points seems that we can't reach an agreement to. Part of the drafted agreement was to include 2 more new partners with a proposed percentage share for each including myself. Just to remind there was none before and there was only myself and my partner.

I have not signed the agreement as I said earlier due to some points in which we could not agree to. Over time, the matter is left undiscussed but monies were issued as per said percentage in the draft agreement.

I would like to know if by receiving the monies besides drawing constitutes as an indication to an agreement. I have offered to return the money as I pointed out that we haven't reached an agreement as yet.

Just to clarify, in my country companies under partnership are exempted from tax. My partner holds authorisation over the company account so meaning to say that he controls the finances of the company. There has never been any profit or loss takings since my inception as a partner and an auditor is hired to account annually.

I am also not sure to whom I should refer to with regards XXXXX XXXXX acts governing companies under partnerships.

Please advise. Thank You.
Submitted: 7 years ago.
Category: Business Law
Expert:  Richard replied 7 years ago.

Hi there. If you do not have a written partnership agreement, you do nonetheless have a partnership. You will be deemed to own this partnership based on the percentages of distributions made and allocations of profits and losses indicated on your partnership tax return. In addition, your state will have a statutory act governing partnerships which will set out as a default much of the terms of your partnership in the event you have not entered into a written agreement.



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Customer: replied 7 years ago.
Hi I need to clarify, my country does not have any taxes imposed upon companies registered under partnerships. Companies under partnership are also not needed to register or submit their finances to the government. We do have an auditor to summarise the company's finances. My partner holds authorisation to the bank account and profits or losses were not distributed between the two of us. So as to speak that he controls the finances of the company.

Only, when it was proposed for the inclusion of 2 more partners into the company was the monies distributed according to the unsigned, proposed partnership agreement.

Does that change your answer? I am not sure of where to refer to with regards XXXXX XXXXX statutory act governing partnerships.