Business partner not pulling their weight

Discussion in 'Legal' started by Peter74, Oct 28, 2014.

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  1. Peter74

    Peter74 UKBF Newcomer Free Member

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    Hi guys,

    I just started into a venture with a partner, no partnership agreement signed yet as she is stalling with everything.

    Essentially, we've been in this for 6 weeks and it's already clear that it's not going to work. She has yet to pay a single bill on time, so I'm fronting everything, and hasn't done a single thing she said she would do on time. We've had 2 "final" meetings al ready where she has promised to improve her behaviour but it's then immediately forgotten about and things just don't improve. Essentially she has not done a single thing she said she would. As soon as money is involved she just disappears, doesn't respond to emails/texts etc, and comes up with an excuse to stall.

    The only bills she has paid are half the deposit on the property (lease in my name) and 25% of a bill for some joinery work carried out.
    She has also paid for some materials and equipment but that spend is fairly minimal.

    It is very clear that her not pulling her weight, and coming up with excuses such as "the bank was closed" for not paying the bills on time means that it's starting to hurt my business.

    I am tied into a 5 year lease, with break after 3, and I'm not willing to have this go under.

    Her total spend is approx £2600 (of which £1500'ish is in a deposit with the landlord's agency but she paid this through me).


    Obviously I have written records, texts emails, meeting minutes etc, of things we agreed..just don't have the partnership agreement.

    Just wondering if anyone can tell me on here before I speak to a solicitor;

    How much would I need to pay her to boot her out of the property and when would I have to pay this? Can I give her 4-6 weeks notice to find a new premises (I would think so as it's in my name) and do I then need to pay her the full £2600 back or can I deduct money from the £2600 for costs incurred?
     
    Posted: Oct 28, 2014 By: Peter74 Member since: Oct 28, 2014
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  2. The Byre

    The Byre UKBF Ace Free Member

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    If everything went through you and it is all in your name, you can give her all her money back and find someone else - or fly solo.

    As it is only £2,600, I would not try to create trouble for myself by making silly deductions, just give her the money and chalk it up to experience!
     
    Posted: Oct 28, 2014 By: The Byre Member since: Aug 13, 2013
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  3. Peter74

    Peter74 UKBF Newcomer Free Member

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    Yeah you're probably right It bothers me rotten to be honest and I'm in a right "cutting off my nose to spite my face" sort of mood, especially as the deductions I could make would probably total 2k'ish.

    Might be too much hassle though
     
    Posted: Oct 29, 2014 By: Peter74 Member since: Oct 28, 2014
    #3
  4. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    10,427 2,109
    Partnership does not need to be signed as a verbal agreement is lawful, she is your partner
     
    Posted: Oct 29, 2014 By: Chris Ashdown Member since: Dec 7, 2003
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  5. The Byre

    The Byre UKBF Ace Free Member

    8,759 3,424
    Absolutely!

    Partnership law is pretty unremitting. Right now, you are almost certainly in a partnership with unlimited joint liability, i.e. if she decides to buy a warehouse for £1m and can't pay for it, you have to! That is what happens if you enter into a commercial venture with one or more others, without an agreement or founding articles.

    The partnership is dissolved the moment one partner leaves and the assets are spit evenly between the partners.

    You may be surprised to find out that even without signing an agreement, there is a presumption in law that a partnership has been formed. This is due to the Partnership Act of 1870. When several people are carrying on in business together with the same purpose, it is presumed that a partnership has been created.

    Partnership Law

    Partnership laws can have serious and far reaching effects – and yet many people going into business together do not even realise they are in a legal partnership.

    Unless it is clearly expressed otherwise, partnership law states that all partners share the partnership assets and liabilities in equal shares.

    This will include such things as

    • The name of the business itself
    • All of the income from the business.
    • All losses and expenses.

    The partnership ends if one partner leaves

    This can be quite serious for a successful business. If one partner leaves, the partnership must come to an end and all of the assets and liabilities of the partnership shared out equally.

    I would try to get her to agree to you giving her the £2,600 in exchange for her agreeing to relinquish all rights and title to the business. It sounds as if she is not really that gung-ho for the whole thing anyway and would probably be happy to be out of it. Try not to refer to a partnership - she might just look up partnership law and get funny ideas!!!
     
    Posted: Oct 29, 2014 By: The Byre Member since: Aug 13, 2013
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  6. Paul Norman

    Paul Norman UKBF Ace Free Member

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    If you are having doubts just 6 weeks in, it is probably time to walk your seperate ways.

    Businesses create pressure. You will not see eye to eye every day. It is about being grown up enough to work together even when it is tough. Kind of like a marriage, only with more pressure.
     
    Posted: Oct 29, 2014 By: Paul Norman Member since: Apr 8, 2010
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  7. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

    4,301 864
    The lease is in your name only.

    Your (best) option is to cease trading and start again with a new partner, if you need one, or by yourself.

    Partnership problems tend to arise after a period of time, seeing as you are at the start of the business and problems are already occurring, its time to act now.

    Best of luck
     
    Posted: Oct 29, 2014 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #7
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