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Ed Turner
Ed Turner,
Category: Law
Satisfied Customers: 1917
Experience:  Director and Consultant Solicitor (Self-Employed) at Ed Turner LLB Limited
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UK, None, Me and my husband started a venture with a friend

Customer Question

Hi Pearl,
JA: Where is this? It matters because laws vary by location.
Customer: UK
JA: What steps have been taken so far?
Customer: None
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Me and my husband started a venture with a friend (Andy) to sell merchandise initially to my husband's fan base (he is in Motorsport). We bought stock (4k) and paid to have it printed/embroidered. My husband has been marketing and promoting it. Andy designed the logo and bought the domain name. We have been working on this for the last 4 months, we have emails back and forth, I have created the website, set up the financials. Because the money initially was coming from us, I suggested setting up an official company with all three of us as directors so that we could have a business bank account and recognise the initial investment. Andy was initially against this. Then two days ago he set up a limited company with him as a director and assigned the logo and domain to the company. Do we now have 4k worth of stock that we can't use?
Submitted: 20 days ago.
Category: Law
Customer: replied 20 days ago.
Good afternoon,
I'm not sure if my question has actually been sent so I will type it again.
My husband had an idea to start a business selling merchandise to his fans (he is a racing driver). He asked his friend Andy to design a logo and get them made. Andy said he would only be involved if I was involved (I run other businesses). I purchased 4k worth of stock and we had it all printed/embroidered. I created the website, created financial reports etc. I have emails spanning 5 months back and forth showing the work on the project. A few days ago Andy registered a limited company with him as the sole director and assigned the logo and website domain name to the company. He is now also saying it was all his idea and he simply asked us to be involved. What position are we in now? We bought all the stock but it has the logo he designed on that is assigned to the limited company he is a sole director of now so we can't sell it, can we? Also, it wrecks my husbands reputation as he has people waiting on orders.
Expert:  Virtual-mod replied 20 days ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Expert:  Ed Turner replied 20 days ago.

Hello.   I am Ed, a Solicitor qualified in England & Wales with over a decade’s experience in the legal profession advising clients.

I specialise in Commercial Contracts, Business Transactions, Employment, Dispute Resolution, Personal Injury and Road Traffic Law and shall be reviewing your legal problem today.

Regarding the site’s automatic offer of a Premium Service Phone Call, I shall be delighted to talk with you by phone to discuss your issue in greater detail if you accept the offer.

However, if you do not want a phone call, please cancel the offer for a Premium Service Phone Call and you will not be charged extra.

Expert:  Ed Turner replied 20 days ago.

It appears that you are in a General Partnership (i.e. not registered as a Limited Liability Partnership (“LLP”) at Companies House) and therefore there is no separate legal personality between the business and personal assets and liabilities of the Partners.

The Partners are essentially a group of self-employed Sole Traders for legal and taxation purposes and are jointly and/or severally liable for the acts of the Partnership.   Whether the Partners have joint, several or joint and several liability depends on the act in question and the circumstances of the act.

The individual Partners are entitled to an equal share of the Partnership’s profits and assets even if they do not contribute Capital or Services to the Partnership equally.   A written Partnership Agreement may vary this provision.

A General Partnership will “Dissolve” when an existing Partner decides to “Retire” from the Partnership (i.e. leave the business), or a “New Partner” joins the Partnership.   If the business of the Partnership is to continue, then the “Old Partnership” will Dissolve and a “New Partnership” comprising the Continuing Partners (together with the “New Partner”) will replace it, with all the assets and liabilities from the Old Partnership transferring to the New Partnership.

However, if the Continuing Partners no longer want to run the Partnership business and it is to cease entirely after Dissolution, the Partnership will be “Wound-Up” and the Partnership’s surplus cash and assets will be used to pay the Partnership’s debts and other liabilities.   If there is a shortfall, the Partnership’s creditors may be entitled to pursue the individual Partners personally for payment of their debts.

In your situation, it appears that one Partner wishes to Retire from the Partnership and leave the business altogether while the other Partner wishes to continue with the business as a Sole Trader.

I strongly recommend that you instruct expert accountants to prepare the Partnership’s Final Accounts and expert business and commercial contracts solicitors to prepare a Deed of Retirement and Sale to the Continuing Partners as a New Partnership or the Sole Remaining Partner to carry on the Partnership Business as a Sole Trader.    This Dissolution and Sale Agreement may share out the Partnership’s surplus cash and assets and apportion liabilities in accordance with each Partner’s contribution to the business.

Expert:  Ed Turner replied 20 days ago.

I hope this resolves your enquiry.   Please revert to me if you require any clarification of my answer to your question and I shall be delighted to assist.

Kind regards

LawyerEd