Thank you for your answer. The business is still trading at this moment in time but not for much longer.
Even though the partner (there only being two partners) , was advised that she was disassociated her solicitor came back with the answer
'We contend that as it is in fact your client who is in breach of the partnership agreement and therefore it is he who Clause 38 applies to (i.e. disassociated) and furthermore believe our client cannot be held to account on such an unreasonable clause which we believe any court will strike out if challenged'
Therefore, the question begs - is she really disassociated? And if not, again is she still liable for the existing debts?
Clause 38 Duty of Loyalty. No partner will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the partnership or that would in direct conflict of interest to the partnership. Any potential conflicts of interest will be deemed an involuntary withdrawal of the offending partner and may be treated accordingly by the remaining partner. A withdrawing partner will not carry on a similar business to the business of the partnership within any established or contemplated market regions of the partnership for a period of at least 5 years after the date of withdrawal.
Her solicitors also state that 'they do not believe that their client has breached the partnership agreement in anyway whatsoever.'
By her solicitors saying the above, does that mean that she is not disassociated as they are saying that she has not breached the partnership agreement? Thanks.
The business is still continuing but, because of the other partner's actions, we will have to cease trading shortly.
Could you simplify 'notice mechanism' ?
What I am really trying to get at is to try and make her joint and severally liable for the business's debts on ceasing to trade as she has contributed by her actions in its demise.
The debts are in the name of the partnership. She was given notice that she was disassociated. Does that make a difference to her joint and several liability to the business?
She walked out last March 2013 and has done everything in her power to destroy the business and has succeeded. When she went, it was worth something, now it is not. Why she would not accept her monetary entitlement is beyond me. Why would anyone set out to destroy their own business!!!
So in a nutshell, even though she has been disassociated, she is still a partner and, therefore, still liable for the debts even after she was disassociated, i.e. not just the debts before she was disassociated before March 2013.
Sorry Alex - so what you are saying is that she is only liable for the debts before the disassociation?