Could there be a clause in the partnership agreement, that someone cannot work anywhere else after 3 months start of business?

Here is the scenario:
I am trying to buy a retail store with another guy. This guy, for some reason (i think tax) doesn't want his name on the partnership agreement. He wants his wife's name on it. He works a job right now, but promises to leave that job after 3 months to concentrate fully on business. How can I have a clause in the agreement to make sure that he does not continue to work anywhere else and puts all the efforts in growing the business? My thinking is that since his wife would be a partner in the company that we will form, can we force him to quit his job even though he is not "officially" related to the business? Just to clarify, his wife is not going to have anything to do with business except for her name. I and the guy would be operating/running it.
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Answers (3)

Glenn M. Lyon

Glenn M. Lyon Avvo Pro

Contributor Level 6
You would not be able to obligate him to do anything as a partner since is not an owner. However, the company can have him sing an employment agreement that has a certain start date and other term. BTW, you should almost never do business as a partnership. Forming an LLC is a much safer and smarter way to do business.

If you would like to discuss any issues further, please feel free to contact my office. My contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.
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Keenan M. Post

Keenan M. Post Avvo Pro

Contributor Level 7
Contact Mr. Lyon to discuss. I can tell you that if this is how the partnership is getting started, run, don't walk away from it. A true workable partnership is an open, honest relationship and even with that it is oftentimes very challenging. Really think through the situation and discuss with Mr. Lyon retaining a right to purchase your business partner's interest after a period of months if you so elect and at an amount equal to his initial contribution. If he knows you have the right to buy him out at specified intervals he will be motivated to work hard; but if he is not so motivated anyway it is probably not a good partnership. Good luck.

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Mr. Post is licensed to practice law in KS and MO. The response herein is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply unsuitable. Mr. Post strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
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Daniel Scott Wright

Daniel Scott Wright

Contributor Level 4
Why not start the business in three months?

Also, I am with the other two gentlemen-- if you're already having trust issues, that is not a good place to start. If you want to continue, you need him to be a party to your partnership (or operating) agreement to make sure that you have the right legal protections in place. Or, if he just will not go for that, you can have similar restraints and protections in an employment or independent contractor agreement. The important thing is to get something in writing with the gentleman you are about to enter into a lasting business marriage with.

Good luck!

Disclaimer: This is not legal advice; I have made a number of assumptions about your situation and do not know enough details to render any legal opinion, nor intend to render one. In addition, we have no attorney-client relationship.
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