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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 9681
Experience:  I have been practising for 30 years.
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I own a business with my now ex partner however its not

Customer Question

I own a business with my now ex partner however its not working the both us in the office together.
Each one wants the other out with an agreement to pay each other back their initial investment.
It was my idea to start the business as I had all the experience and knowledge however he had the more funds so he is owed £7K and myself £4K
Is there anyway this can be sorted out as noone is willing to give in?
Submitted: 1 year ago.
Category: Law
Expert:  F E Smith replied 1 year ago.

If there is no agreement to the contrary, as to what each of you would put in and what each of you would get out, and there is no partnership agreement, then the 1890 Partnership Act applies which says that profits are split 50-50 regardless of the money and effort that each of you put in.

There is no provision in the act for retirement or for one person to buy the other one out and if you can’t to an agreement as to how the businesses to be sold or divided, the partnership was dissolved and the assets sold off and the proceeds divided.

There is no legal solution, other than going to court if neither party wants to give in and it is likely that unless there is a meeting of minds, both of you will be losing out substantially.

From what you have said, as he has no expertise, and you can’t buy expertise, it might not be a good idea for him to carry on his own.

Can I clarify anything else for you?

Please rate the service positive. It doesn’t cost you anything but helps me greatly.

We can still exchange emails. Best wishes. FES.