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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11563
Experience:  30 years as a practising solicitor.
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I am in partnership with my sister. She was left my late

Resolved Question:

I am in partnership with my sister.
She was left my late mothers share business making our partnership 50 50,
But her with my mothers capital share.
All other siblings have put in a legal rights claim. As I am reponsible for 50 % of monies due by company. Can I be held accountable for a legal rights claim?
Submitted: 1 year ago.
Category: Scots Law
Customer: replied 1 year ago.
I'm terrified I'm going to loss my livelihood.
Because my sister inheritad everything.
I know I'm 50 responsible for all company debts. Can I be responsible for this?
Customer: replied 1 year ago.
I would be willing to buy her out to level of legal rights. But couldn't afford anything else.
Expert:  JGM replied 1 year ago.
Technically the sister's half share forms moveable property and has to be used as part of the legal rights claim. If that is still held within the capital of the business as part of your sister's capital account then that capital account would have to be reduced to the amount required by the estate to pay the legal rights and the business would have to pay that to the estate.
Customer: replied 1 year ago.
so I would be responsible to pay it? allow it would come out of her capital? sorry bit thick but is this what you mean?( so stressed with-it all that I cant focus)
her lawyer said that she didn't have to pay legal rights out of her drawings. but she has used up her capital and is drawing on my mothers effect. in business so far.
Complicates things further is that we have no formal partnership agreement to state on how much we can draw.
does this make a difference.?
Customer: replied 1 year ago.
my other sister is talking about sending in a sheriff officer, would they seize the shop money or would they stop my sister from drawing on capital she doesn't have?
Expert:  JGM replied 1 year ago.
No formal agreement normally means an equal split unless there is evidence to the contrary.
Basically, your mother's capital account was bequeathed to your sister but it is a moveable asset of the estate. The amount of legal rights has to be paid from moveable estate. If any part of the moveable estate has to be cashed in to pay legal rights then that has to happen. A capital account can be cashed in by the business paying the relevant amount to the estate and the sisters capital account being reduced accordingly. If she has drawn her capital account then the business has to make up the difference as she should not have been allowed to do so. The business would have a claim against her to repay the capital.
A sheriff officer could serve court papers seeking payment or it could be a number of things, depending on a number of factors including whether there has been any litigation about this.
Customer: replied 1 year ago.
How would we get her to do this, it would seem that it all involves costly court cases.
there is seemly nothing I can do to stop her drawing what she wants?
(No litigation).
She is responsible and I have to pay seems so unfair.?
Expert:  JGM replied 1 year ago.
You are a partner in the business. You simply tell her not to draw from the business. If she refuses, threaten to have a judicial factor appointed, which is to a partnership what a winding up order is to a company.
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