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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24870
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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70% owner of a business what are my rights as to buying out

Customer Question

70% owner of a business what are my rights as to buying out the partner
Submitted: 3 years ago.
Category: Business Law
Expert:  Law Pro replied 3 years ago.
Hi! My name is Fred and I'll be the attorney assisting you.

First, what state is the corporation incorporated in?

Is there a buy-out provision within the by-laws or is there a shareholder's agreement in place?
Customer: replied 3 years ago.

Its just a partnership that I sold last year. I sold 33% of my business with all operations still to be run as I see. Its a Tennis retail and export business. Wanting to see if I can buyout if I need to.

Expert:  Law Pro replied 3 years ago.
Oh, do you have a partnership agreement - it would appear not but I need to ask.

What state is the partnership operating in?
Customer: replied 3 years ago.

California and I do have an agreement but nothing about buyout

Expert:  Law Pro replied 3 years ago.
OK, if you don't have a buy-out agreement within the partnership agreement - then you have limited options.

A partnership does not require a written agreement that includes a buy-out provision but it's smart if they do. If there is an agreement, then the partners are free to determine in that agreement their rights, including how and when and on what terms a partner can withdraw from a partnership.

If you do not have a written partnership agreement, then any partner can withdraw at any time under California partnership law. By withdrawing, a partner is entitled to be bought out. The first step is to get an “accounting” which is a financial snapshot. Then, the bought out partner is to be paid for his share.

However, you can't force a partner to relinquish their interest in the partnership - force them out.

Your only options are to come to agreement as to buying them out and if you can't dissolve the partnership, have an accounting, split the assets, and each move on.