Skip to main content

Ohio Partnership Law for a General Partnership of 5 individuals each owning 20% of the Partnership.

Steubenville, OH |

This partnership was a handshake no written agreement. It was the commercial buildings that were rented to their corporations. It worked fine for years. Then 3 of the partners
(2 brothers and the managing partner) said one partner took to much from the leasing corporation and he had to pay and give up his share of the partnership. It was cheaper than court. The three got his 20% taking them to almost 27% ownership and the other partner wasn't offered any. He had his 20% still. He later passed away and it went to his trust. The other three partners sold it at about half price and said there was nothing the trustee could do to stop it. Is this true?

+ Read More

Attorney answers 1

Posted

Please clarify what you mean by "the other three partners sold it at about half price and said there was nothing the trustee could do to stop it."

Do you mean to say that they sold the deceased interest in the partnership? Sold the entire partnership?

What year did this take place in?

Additionally, it's unclear what happened when "one partner took to much from the leasing corporation and he had to pay and give up his share of the partnership?"

It's hard to answer your question without better details.

Asker

Posted

The partner in charge of running the dealerships was the one who gave up his interest. The 3 other partners said he and my father took to much money in equipment leases to the Corporations. The 3 partners said, give us $100000.00 and your interest in the building and we will drop it. He said no he did not do anything wrong. His Attorney said he will have $200000.+ in fees by going to court so he gave in. That left my father and the brothers in the partnership. My father passed away and about 3 months later they sold the buildings for almost half price. We said we don't want to sell our 20%. We knew what was coming to the area.They said there was no agreement ever drawn up. We don't need to agree or sign anything, they can do it all and that is what they did. It took place in 2012.

Aaron Michael Minc

Aaron Michael Minc

Posted

Again. I'm a bit unclear on the facts and can't give you an answer. However, I can say that a lot would depend on who had what % of ownership interest and voting rights in the company and what type of authority each partner had to act on behalf of and bind the partnership. It would also depend on what agreement were previously formed and what sort of information or limitations on power were contained in the partnerships operating agreement. With all that being said, if the partners who sold the real estate own a majority interest in the company and it was not a self interested transaction, then there is potentially nothing wrong with what they did.

Asker

Posted

The tough part is the fact that there was never a partnership set up. They owned 3 car dealerships that were all Sub S corps and had the building rentals pay them to get money out of the S Corps. They all paid 20% of the building. There was never a meeting, they just divided year end income by 5. The corps took care of maintenance. There were no agreements set up. It was a matter of the Sub S Corps paying rent if they could and then dividing it by 5 and sending K1 forms. Each person technically owned 20% of the buildings.

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer