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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10793
Experience:  Barrister 17 years experience
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I set up a landscape business with a friend in a 50/50

Resolved Question:

Hi,
I set up a landscape business with a friend in a 50/50 limited partnership. Over the last year he has repeatedly faid to; turn up, be involved in day to day running of the company, caused us to loose profit, be involved in illegal activity with both drugs and business I.e cash work.
When I question him and try to encourage him to be more involved he would turn off his phone, block any communication I try. Now he has arranged a meeting with our accountant to dissolve the company.
I have invested everything into the business and we have built a fantastic customer base and reputation.
I want to continue without him, How do I do this? He will most definitely want to sell everything and ceased trading under our name
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.

1. Dear Steven, at the outset, you need to realise that you cannot force someone to work or to continue in partnership with you. If this friend wishes to dissolve the partnership and seek to work elsewhere, you cannot in law, force him to continue working in partnership with you. Accordingly, at this stage, you need to consider what form of business you wish to have yourself after the partnership has been dissolved, or else, you buy him out of the partnership and reach some agreement as to no longer use his name.

Expert:  Buachaill replied 1 year ago.

2. However, you will need to consider what form or structure you wish to trade under. Do you wish to be a sole trader or do you wish to incorporate a limited company and trade as a corporate venture? However, some plan must be set out for you to move forward. However, you cannot force someone to be your partner in a partnership, so for that reason you need to realise that the previous arrangement with your friend has come to an end.

Expert:  Buachaill replied 1 year ago.

3. Please Rate the answer as unless you Rate the answer your expert will receive no payment for answering your question.

Customer: replied 1 year ago.
Thank you for the advice, but I don't want to force him to do anything.
I've just invested all I have and he could try and take more than most would consider to be a fair share.
Yes he is a 50% share holder but I have done 90% of the effort and financing. what If he wants my to buy him out with 50% of the value of the company?
Expert:  Buachaill replied 1 year ago.

4. When a limited partnership gets wound up, there are rules laid down as to how the assets of the partnership and the capital invested has to be divided up. So, you will get any capital invested back. Then it will be equal division. However, there is no computation of what effort was put into the venture. Ultimately, if there is to be some agreement as to buying out, you will have to negotiate with him. Otherwise, the statutory scheme for winding up applies, which is basically that you get your capital back and then it is equal division of the remainder.

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