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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 30929
Experience:  Over 5 years in practice
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I am an equal partner in a two person partnership that has

Customer Question

I am an equal partner in a two person partnership that has been trading for 7 years.
The relationship is strained and my other partner is becoming obstructive and difficult to work with. She says she will leave if the business gives her a good long term salary every month, which the business cannot afford as she would need to be replaced. Being an FSA/FCA registered insurance broker and the named 'controller' from an FSA perspective at least, I would want to stay in the business if she did leave.

We work from two separate home premises and it is now becoming commercially important to rent an office and work together. She is refusing to do that.

What can I do to resolve the situation? As an equal partner what action can i take to protect the business and remove her from it?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Is there a partnership deed? What assets does the partnership have?

could you buy her out of the partnership?

Kind regards

AJ
Customer: replied 2 years ago.

There is a partnership agreement and the partnership has negligible assets - some computers and approximately £10,000.00. I have asked her to suggest how much of that liquid capital she would accept to leave but she is insisting on a salary until she finds another employment - which the business cannot afford.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I will write a response now detailing your options.

This may take me a little while so please do not be concerned if you do not hear from me until later tonight.

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

MY apologies but I have been doing some research and thinking about this and there are two issues I need to square.

Is your FCA registration personal to you? Can you transfer it into another legal entity or say the partnership were to dissolve would you still have it?

Do you need the trading name of the partnership?

What does your partnership agreement say should happen on dissolution?

Kind regards

AJ
Customer: replied 2 years ago.

The FCA registration applies to the partnership name but I am the named 'controller' for FCA purposes. I can see no reason why this cannot be amended to cover a change of status from a Partnership to a Proprietor.

I would need to continue with the name of the partnership, particularly for FCA registration purposes otherwise the business will be listed as a newly FCA registered business and not a business of 7 year history withe the FCA which is a significant customer comfort.


 


The partnership agreement states that the partnership can be dissolved by a 50% vote - which I have.


In dissolving a partnership am I required to surrender the business name? It is not a registered trade mark.


 


 

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

If you dissolve the partnership the assets will be split between the partners in equal shares.


If she has said she wants to leave the partnership that in itself is an act of dissolution.

You would have to get her to agree to sell you the business name or for example she can take cash in the bank and in return you take the compute and assets. I think though the only option is to start again with a new entity.

Will she negotiate at all?

I look forward to hearing from you.

Kind regards

AJ

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