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How do I protect myself when one partner wants more than they agreed

Roscoe, IL |

I signed a year lease on a building to form a buisness with w partner. We verbally agreed to split everything 50/50 from bills to profits on services and products. Now she wants 100% of all services that she performs and is wiping our bank account clean. How can I protect myself

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Attorney answers 2

Posted

It is unfortunate that you did not have an attorney to draft a written owners (shareholder, operating, or partnership) agreement. Regardless, it appears you have an oral agreement to form a partnership or joint venture. That means you both of contractual and fiduciary obligations.

The best way is to get a signed agreement, assuming this business venture should be saved (which I question based on the new demands and the account threat) You say she is "wiping" the bank account. How much of that are your funds? Aren't you both on the account? What basis would allow her to remove all funds from the venture account.

Ultimately, you need to get what you should have had at the outset, namely an attorney. The attorney can be available to attempt to resolve this dispute and if that is not possible then consider legal options for breach of contract and other claims. Good luck.

This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.

Asker

Posted

Thank you so much. "By wiping the bank account clean", I meant that most of our income is made up of services she provides. I am not a practioner, but manage all the inventory. Instead of putting this in the bank, she wants 100%. Unfortunately, this was my idea to have this place to help people, but she was "the hands" of the group - I work on advertising, paperwork. I'm basically a glorified manager. But we both put 50% in financially. We are both on the account. And I don't know what "basis would allow her to remove funds"... that is my question, too. But, thank you again, you confirmed my initial thought which was - do I need to get an attorney.

Robert John Murillo

Robert John Murillo

Posted

Ultimately the issue is what was your agreement. As is obvious, an oral agreement is hardly ideal as you will say it was X and she will say it was Y. Maybe you got lucky and have witnesses to when you two agreed to the 50/50. If so, great. If not, that is a problem. The end result is that you do need to hire a good local attorney. While I have an IL license, that is inactive and I cannot advise you on anything about IL law. An attorney on Avvo, Linscott Hanson, seems pretty sharp and is active in IL. You may want to search him here and look at his answers and consider contacting him directly on the matter. Maybe he can help or has a referral. Good luck.

Steven D. Imparl

Steven D. Imparl

Posted

Retaining counsel immediately is important. The situation seems like one that could deteriorate fairly quickly, and there may still be some ways to preserve your rights and get the business relationship on track. Getting your and your partner's agreement in writing is definitely the way to go. The lawyer will also need to know how your business relationship is structured: partnership, corporation, limited liability company, or joint venture (not a separate structure, but some business people consider it a functionally distinct business vehicle). The law governing the type of entity you have will dictate your rights under an oral agreement or in a situation where there is no agreement on certain parts.

Asker

Posted

Thank you again. I have talked to legal counsel, but I was later than I thought. My "partner" has taken all the money out of the bank and moved it. Now I just want to get out of this lease. I will worry about my money and the business later, though, I see no point and resuming any sort of relationship, business or otherwise at this point. I don't want any more legal ties to this person. How can I get out of my lease legally without any further liability?

Robert John Murillo

Robert John Murillo

Posted

If you signed the lease personally or as a guarantor, you are bound to the lease. It does not matter to the landlord that you are having issues with your partner. You are going to have to hire an attorney to resolve this problem. Sorry and good luck.

Steven D. Imparl

Steven D. Imparl

Posted

While I understand that you consider the lease to be your paramount concern, do not delay your concerns about your money and your business. You may be able to recover your part of the money, but the longer you wait, the harder it is likely to be. Moreover, other business losses are very likely to increase with the passage of time. With respect to the lease, I cannot tell you anything about how to get out of the lease--or whether you can get out of it--without seeing the document and discussing it with you. -- I am licensed to practice law in Illinois. If you wish, please feel free to contact me for follow-up about this matter by e-mail at STEVE.IMPARL@GMAIL.COM .

Posted

The gist of my answer appears in a comment below attorney Murillo's answer. I want to add that lawyers are trained to resolve disputes and there are often a number of creative ways to settle differences and preserve business relationships. One thing to consider in preparation for such discussions with a lawyer is the origin of your dispute with your partner. (Because fact about the origin of your business relationship and the dispute likely contain confidential information, I strongly recommend that you *not* post such details here or in any public forum. I am just offering a suggestion that may be helpful as you prepare to consult with a lawyer about your issur.

I am answering this question and other questions related to the law, here or at other Web sites or other Internet forums, solely to provide general information. None of this information is legal advice. My answering this question and your or any person's reading my answer or any information to which my answer may refer or link does *NOT* create any attorney-client relationship between me and you, or between me and any other person. You should not disclose any private or confidential information publicly, whether on the Internet or otherwise, and you should consult with a lawyer licensed to practice in your state to obtain customized legal advice for your unique situation.

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