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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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I am a Professional in the RV section. My question pertains

Customer Question

I am a Professional in the RV section. My question pertains to a partnership I have with a sister. We have just a "Statement of Partnership" filed naming us as partners without any other stipulations. It is understood that we both have a 50% interest. She has been running the business ever since it opened in 2006 and I have provided whatever capital has been needed and worked there part time. She suddenly and without notice left in early November and I haven't heard a word from her. She hasn't responded to an e-mail I sent and she has no cell phone. My wife and I are trying to keep the business open, but we both have another business so it is very hard to do and we can't afford to pay someone to run this retail store. I am familiar with "Dissociation" but, if I do that to her and she refuses or can't buy out my interest what are my options? Any type of filing for someone walking away from their interest? I can't sell it without her approval as far as I know. Suggestions?
Submitted: 4 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 4 years ago.

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.

Customer: replied 4 years ago.
I think you have assisted me before..............and thanks for the prompt response.

The Statement of Partnership makes no mention of any duties or restrictions or any kind.

Do I understand you correctly that if I can find someone willing to just take over my position in the partnership I can file paperwork to accomplish that so long as it is not someone I have a personal relationship with of some kind AND no money is involved?

OR I may be able to sue her for breach of fiduciary duty? That might be tough if I can't have her served OR is there a way without service as long as I mail it to her last known address?

Expert:  Dimitry K., Esq. replied 4 years ago.

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.

Customer: replied 4 years ago., 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.



Expert:  Dimitry K., Esq. replied 4 years ago.


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

Dimitry K., Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
Thanks! I will check on this and you have been very helpful! All the best and I will get back with a follow up if I think of something else. R.J.
Expert:  Dimitry K., Esq. replied 4 years ago.

Great! I look forward to helping you further and have a wonderful weekend!