Can my restaurant business partner run away to another state?

Asked over 1 year ago - New York, NY

My partner and I have a corporation (restaurant), 50% each, no business contract, we created debt and trying to pay them off, now our lease coming to an end, we are trying to renew it, but my partner decided to move to another state and do some business there, first he ask me to continue paying his salary when he is gone, witch I refuse because he is not working anymore. To me he is running away from his responsibilities with the debt? Can he go away like that and I have to take care of the rest, and pay someone else to do his job (cooking). And can he go to the bank and withdrawal money for himself anytime? Money that the business need to pay bills?

Attorney answers (4)

  1. Frank A. Natoli


    Contributor Level 20


    Lawyers agree

    Answered . I agree with Mr. Doland. He is not obligated to go down with the ship but he cannot suck all the good money out of the business either especially if you have debts that need to be serviced.

    We have seen many of these kind of issues come up in our NY practice. I suggest you discuss your situation over with a lawyer in private so all the facts and circumstances and be explored and a best course of action can be reached.

    Most of us here, including myself, offer a free phone consult.

    Best regards,
    Natoli-Lapin, LLC
    New York, NY
    (see Disclaimer)

    The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the... more
  2. Michael Charles Doland

    Contributor Level 20


    Lawyers agree

    Answered . Yes, he can move to another state.

    The corporation has dept, and unless guaranteed by the shareholders (or others) does not impose personal liability to stay on a sinking ship. He may not however, perform any fraudulent transfers or take excess distributions. It may take a lawsuit, however, to demonstrate that and get a court judgment.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  3. Michael Wayne Goldstein

    Contributor Level 9


    Lawyer agrees

    Answered . I agree with the other attorneys' answers.
    If you want to discuss this further, please call our office tomorrow, or complete the Contact Us form at our website

  4. Yan Margolin

    Contributor Level 8

    Answered . Let me add that you should be careful with the term "salary". Partners or shareholders do not have a salary, generally, unless they are also employed by the corporation in a separate capacity. Instead, they receive dividends, or enjoy the growth of the value their ownership has. If the business is under water and in danger of closing, then all funds must, by law, be directed towards either paying those debts off, or attempting to resuscitated the business. By no means should you stand by idly while he raids the cookie jar.

Related Topics

Small business partnerships

A business partnership is an arrangement whereby parties enter an agreement to cooperate for their mutual benefit.


Business law covers topics such as business structures, common documents, business taxes and finances, insurance, real estate, and government regulations.

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