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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55715
Experience:  32 years of experience practicing law and a businessman.
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I have a business partner who can not perform her duties and

Customer Question

I have a business partner who can not perform her duties and I want her out and she refuses to go
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.

Good afternoon. My name is ***** ***** I look forward to helping you.

What kind of business structure is your business? Are you 50/50 owners. Does your agreement between the two of you....partnership agreement, operating agreement, bylaws, etc, whichever is applicable, address the issue at all? Thanks.

Customer: replied 1 year ago.
restaurant 50/50 owners can not find any agreement we may have signed when started. We are subleasing a restaurant and we do not actually own anything, but it is a land mark and the owners have offered us a renewal of lease for 5 more years staff and I are sick of her personality changes from day to day she has a been known to come to work on something or has been seen smoking illegal substance on property
Expert:  Richard replied 1 year ago.

Thanks for following up. Do you file your tax return for this business as a partnership?

Customer: replied 1 year ago.
Expert:  Richard replied 1 year ago.

Thanks. When there is no agreement, the SC Uniform Partnership Act becomes applicable. If the two of you are not able to come to an agreement voluntarily for her to leave on terms that are agreeable to both of you, you have a couple of alternatives which give you leverage to "encourage" her to withdraw.

One, you have the right to file a suit for a breach of fiduciary duty. Specifically, this is your right under the following statutory provision:

"SECTION 33-41-540. Partner is accountable as a fiduciary.

(1) Every partner must account to the partnership for any benefit and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct or liquidation of the partnership or from any use by him of its property.

(2) This section applies also to the representative of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representative of the last surviving partner."

Two, you also have the right to seek a dissolution of the partnership through the courts due to her failure to perform her duties. That statutory provision is:

"SECTION 33-41-940. Dissolution by decree of court.

(1) On application by or for a partner the court shall decree a dissolution whenever

(a) a partner has been declared a lunatic in any judicial proceeding or is shown to be of unsound mind,

(b) a partner becomes in any other way incapable of performing his part of the partnership contract,

(c) a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business,

(d) a partner wilfully or persistently commits a breach of the partnership agreement or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him,

(e) the business of the partnership can only be carried on at a loss or

(f) other circumstances render a dissolution equitable.

(2) On the application of the purchaser of a partner's interest under Section 33-41-740 or 33-41-750 the court shall decree a dissolution

(a) after the termination of the specified term or particular undertaking or

(b) at any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued."

Expert:  Richard replied 1 year ago.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). I thank you in advance for taking the time to provide me a positive rating!