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Business partner selling store

Pittsburgh, PA |

Can a business partner that owns 51% of the business sell it without the approval of the other partner who has 49%?

Attorney Answers 3

Posted

It would depend on your Operating Agreement. It should state what decisions require unanimous approval and what decisions require majority approval.

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Posted

As was previously stated, your "partnership" documents will govern what your partner can and can't do. If the business is a corporation, then a Shareholder Agreement and the corporate By-Laws will govern whether the 51%owner can sell without the approval of the other partner. If the business is a limited liability company (LLC) then the Operating Agreement will govern the way decisions are made. If the business is a general partnership, then the partnership documents will govern. Often, major decisions such as the sale of the business require unanimous decision of all owners. However, the documents can override this and only require majority vote of the owners.

This reply does not create an attorney client relationship and is not intended to provide legal advice on your specific situation.

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Posted

I'll bet you don't have a written agreement and, if you do, I'll bet it doesn't address the question. If it did, you probably wouldn't be asking. If you have a general partnership (and it sounds like you do), either of you can terminate the partnership just by saying so. At that point, you liquidate. He gets 51%, you get 49% -- there may be some problems dividing assets with no practical way of determining fair market value. Then, he can sell his 51%.

If you don't know whether you have a general partnership, see a lawyer.

Clifford L Tuttle, Jr
Attorney at Law
Pittsburgh, PA

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