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Hello, this is Jim and I am a dual-qualified lawyer (UK and Republic of Ireland) and happy to help you today.
If you do nothing, you still have a partnership under the Partnership Act 1890 - so you are both liable for 50% of the debts and also own 50% of the business (your partner has a claim on your up front payment too). The way around this is to ensure you have a partnership agreement drawn up to say that in the event of you leaving or within 6 months as you have said, you get your investment back. You can tailor and download a partnership agreement at the following site:
The document should be signed and witnessed as it would be a legally binding agreement. This is all you need for your purposes - it would be used in court if there was ever any dispute.
I hope this helps – if you can please give a positive rating by clicking 5 stars (at the top of your screen), I can answer any follow up questions at no extra charge and I will be credited for helping you today.
If you have no partnership agreement, you both own the assets equally (which includes the £40K). That is why it is so important you have an agreement which clearly refines your rights. You can add in a clause for when you leave the business or in 6 months - you can add in a paragraph for "reimbursement" - as long as something is in the partnership agreement then you are protected.
Yes, he would provide you with a promise to indemnify you (to pay you back). You are spot-on with your summary.
I hope I have answered your question. Let me know if anything requires clarification. In the meantime if you could either leave a star rating, or reply “yes”, I would be very grateful.
Hi, any chance you can rate the answer first (the initial question was about which agreement to use).
Hi, the question was about the type of agreement which has already been answered. Further questions about content ideally need to go in another question (if you're a member then it won't cost extra to post new questions).