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I own a small business, when bought I had a contract with my…

I own a small...

I own a small business, when bought I had a contract with my brother he gets 25% and my mom gets 25%. However he has never paid taxes on the money I've given him and my mother and now he says he wants me to sell my business. He said he will be serving me soon with papers to go to court.

Lawyer's Assistant: Since laws vary from place to place, what state is this in?

California

Lawyer's Assistant: Has anything been filed or reported?

Everything is in my name. I am an Llc and neither of their names are ***** ***** They just take the money.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Connect me.

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Answered in 12 minutes by:
9/9/2017
Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 42,541
Experience: 17 years practicing attorney, JD, BA, MBA
Verified

Hello and welcome! My name is ***** ***** I am a licensed attorney and will try my best to help with your situation. There may be a slight delay in my responses as I type out an answer or reply.

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Why were you paying brother and mother half of what you earn?

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Did you buy them out?

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How long were you supposed to pay them?

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Is brother a member of your LLC?

.

Are you reporting to the IRS that you are paying him from the money earned by the LLC?

.

.

thanks

Barrister

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Customer reply replied 10 months ago
My brother won the lottery I had a home daycare. He bought the school with his money and I would run it and in return he and my mom would get 50% of the profit. I've owned the school for 13 years and it is still doing good. He wants me to sell the school so he can use the money on other investments. My brother not my mom are members of the LLC. I have not reported it to the IRS.
Customer reply replied 10 months ago
My brother and mom are not members of the LLC.

Ok, if he owns the school and basically rented it to you to operate the daycare out of in return for half the profits, then he basically is your landlord and if he has decided he wants to sell the building, then legally he can do so. I don't know what papers he would be serving you with, as he could sell the building with you in it, but he may be talking about terminating your tenancy and evicting you from the property so he can sell it empty.

.

If that is the case, the unfortunately, legally he could do so if he is the owner of the building. He would have to first give you a written 60 day notice to terminate the tenancy before he could file a formal eviction action in court to get a judgment and a writ that the sheriff would execute to force you to vacate.

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So you would be looking at likely 3 months or so before he could force you out so you could see if you could relocate to a different location..

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.

Barrister

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Customer reply replied 10 months ago
He does not own the school. Everything is in my name. On paper I own it.
Customer reply replied 10 months ago
He paid for the business not the property.

So who owns the land that the school is sitting on isf he paid for it?

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Customer reply replied 10 months ago
I lease the property from a church. We bought the business in 2004 for $183,000.
Customer reply replied 10 months ago
The lease everything is in my name everything

or are you saying he actually owns the daycare business and you operate it for him, basically as his manager?

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Customer reply replied 10 months ago
I've been reading online it looks like a limited partnership
Customer reply replied 10 months ago
I've given him over $160,000 in profit. he bullies me all the time.

Ok, if this is a partnership, the he is likely talking about a "partition action" which is when one partner files suit against another to have a judge order a sale of an asset so that the partnership can be dissolved. It is the way that things are split up if the partners can't agree privately about selling or one buying out the other..

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Customer reply replied 10 months ago
What can I do to protect myself? I don't want to sell my school. It provides for myself and two daughters. My brother is filthy rich. This is all I have.

I hate to say it, but legally not much if brother is the one who bought and owns the school with his money. You can try to contact a bank and see if you could get a loan to buy him out, but otherwise he can legally force a sale of the school or whatever his interest is in it.

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However, he may find that no one is willing to buy the school business if you aren't running it, so if you talked to a bank and got them to back you, you might be able to buy it for a small amount..

.

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thanks

Barrister

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Customer reply replied 10 months ago
When you say he owns the school however the business license all the licenses are in my name it is an LLC in my name only. the contract that we do have only talks about him getting the 50% does that little contract just stating he gets 50% means he owns the school when everything is in my name. He is a shady guy he puts nothing in his name all of his properties are under my mothers name to avoid child support and divorce alimony
Customer reply replied 10 months ago
Does the contract of him getting 50% technically say he owns the school is what I am asking you?

Who put down the $183,000 to buy the business?

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When the business was bought, whose name did it go into?

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Did brother gift that money to you?

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What does the contract say... you agree to pay him 50% for 1 year, 10 years?.. 100 years?.. forever as long as you operate the business?

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Customer reply replied 10 months ago
I just looked up partition action it refers to real estate? My Brother put the money in. The business is in my name. He put the money in for 50% of the profit. It is a simple contract only stating he gets 50% of profit, there's no time frame. I need a lawyer are you in the Los Angeles area or do you have any referrals.

A partition action typically deals with real estate but it is used for any division of jointly owned assets when the parties can't agree.

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If the contract only says that he gets 50% of the profit, then that is all he is legally entitled to, regardless of how much that is. He doesn't have the right to force you to sell the business if his name is ***** ***** it or the lease and he is only entitled to a share of any profits.

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But if he files suit, then you definitely need an attorney to represent you and defend..

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Unfortunately, I am not allowed to represent customers from the site or recommend anyone personally under my agreement with JustAnswer. However, these are a couple sites that we attorneys actually use if we need local counsel in a state where we aren't licensed. Further, customers have consistently reported good results with these sites:

.

www.martindale.com

.

www.lawyers.com

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They screen their attorneys based on geographic location, area of practice, time in practice, cost and customer reviews.

.

.

thanks

Barrister

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Customer reply replied 10 months ago
Ok, thank you.

You are very welcome. Happy to help any time.

.

It was my pleasure to work with you and help with your question. If you ever need me in the future, you can post a new question with "For Barrister" in the caption and the JustAnswer employees will get it to me.

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If you feel I have answered all your questions, I would very much appreciate a 5 star rating by clicking on the rating scale on your screen as that is the only way I receive credit for my work.

.

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All the best to you and yours

Barrister

Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 42,541
Experience: 17 years practicing attorney, JD, BA, MBA
Verified
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