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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi there I was asked to start up a business last year with

Customer Question

Hi there

I was asked to start up a business last year with a friend of mine. I said from the outset that I cannot provide any funding but I will help him and work with him to help create the business. He offered me a 50/50 split in the business.

We didn't write out a partnership agreement but we did create a joint bank account. During this time my "business partner" was putting in his own money from his own bank account to fund it, I paid little but helped build the business through my involvement of the website, attending functions etc.

About a year down the line I decided that all my time was being taken up with the business and I no longer wanted to be a part of it. So I told my "business partner" that I wanted to leave. It was left quite amicably. I then sent a dissolution letter to my "business partner" to tell him that I no longer have any comeback from the business. This was signed and sent to him on the 7th of April.

From that point on things got quite nasty and I've now received a text from my "business Partner" that legally I owe him half of the £40,000 he put into the business. The business is still going but it has since become a ltd company.

Am I legally liable to pay him half?
Submitted: 4 years ago.
Category: Law
Expert:  Ash replied 4 years ago.

AlexWatts2013 :

Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return. For now please let me know is it a partnership or Ltd co?

JACUSTOMER-7414gul4- : Hi Alex, the business was a partnership, although it is now changed into a ltd company 4 months after I left. We never drew up a partnership agreement but we did have a business account. The money that was spent by my business partner never went though the business account so a lot of the money he spent I had no idea about. Am I liable for his investment or am I just liable for the money owed at the time of my leaving the business?
AlexWatts2013 :

Was it ever agreed you would put in half of the amount?

JACUSTOMER-7414gul4- : No, I did not offer to pay half, however I did say that I would pay bits wherever I could. I also have an email from my "business partner" asking me to join him in starting up a new business and that "funding was not necessary" from my part.
AlexWatts2013 : Legally no. If it was never discussed or agreed then you are not entitled to pay this amount. If it ever went to court he would have to show that there was an agreement written or oral that you would pay. This was never agreed so in reality there is nothing he can do. Partnerships are 50/50 but that does not have to be equal in terms of money. One party could be bringing knowledge and skills with the other finance. So no, I would not be concerned as there is no evidence this was ever agreed.
AlexWatts2013 : I trust this fully resolves your question and if so could I invite you to take a moment to rate my service, as your feedback is important to me. If you need further information or help then please click rely. Alex
JACUSTOMER-7414gul4- : Thanks Alex, you've really settled my nerves on this matter. Thank you for answering over the weekend too, it is very much appreciated.
AlexWatts2013 :

You too. Please do take a moment to rate the service I have given you - thank you. Alex