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A little background. Under Texas law Securities, such as stocks and business interests are not registered with the secretary of state, or the Comptroller’s office, and you are not required to notify the secretary of state when shares are issued or transferred between partners.
The Comptroller requires that you register the business for Texas franchise tax collection All Texas corporations, limited liability companies, limited partnerships and professional associations must register or update the information after the transfer of interests. So if Joe is no longer part of the business you must update and remove his name from the Comptroller, but if you are going to buy out Gus, then you should wait to after the transfer/buyout to update the Comptroller’s information. The question of whether Gus has any right to the company would be governed by any agreements, written or oral and statutes. If it is neither a corporation, or an LLC, then any under Texas law a Partnership is formed “when two or more persons associate to carry on a business for profit.” Texas has no requirement for a formal writing of any kind—even to be filed with the state. In your case, in the event of a disagreement between the partners, you and GUS and his rights and duties are governed by Texas statutory law.
Therefore, just because a partnership agreement is not required by the state, does not mean he does not have any rights to the business and money. You should consult a local attorney to see the best steps to remove Gus and minimize any buyout he may seek. Just because all the property and registrations are not in his name, does not necessarily mean he is not legally entitled to any profits.
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