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JGM, Solicitor
Category: Employment Law
Satisfied Customers: 12092
Experience:  30 years experience as a solicitor.
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, We have an issue where my farther is a senior partner

Customer Question

We have an issue where my farther is a senior partner in or family business and the second partner is his brother. With on going disputes , his partner ( brother) does not want to work , and he is deliberately trying to sabotage the business. He takes a wage every week but wont work.
We have offered to buy him out but he has refused. When trying to purchase new machinery he is trying to put a block on any transactions and insisting on telling the accountants etc that we are going bankrupt, which we are not.
Therefore , please may you confirm:
1) is what he is doing illegal ? in terms of deliberate sabotage?
2) what options are available to get him out of the business, given the fact he wont work, allow the business to grow and wont take a pay out?
Please advise what is available to us to keep the business running force him into being bought out or dissolving the partnership.
Unfortunately the partnership falls under the 1890`s partnership act.
Thank you for your time
James Wild
Submitted: 2 years ago.
Category: Employment Law
Expert:  JGM replied 2 years ago.
1. What he is doing is not illegal in the criminal sense. However, a partner in a firm must act in the best interests of the firm and from what you say he isn't doing that. What he is doing is wrong in the civil law sense and he could be held liable in damages for any losses to the firm if he has deliberately gone out of his way to damage the firm.
2. You can't force him into being bought out. In a two partner firm one partner can't expel the other. All that can be done is that your father has to give notice of determination of the partnership, ie, notice of dissolution. That would result in the partnership being wound up which would not normally be in anyone's interests. However you can't force him to accept a cheque for his capital account and in those circumstances the only option would be for your father to have the partnership wound up and for him to start again.