Help....where do I stand legally

[mefem38]

Hi all
I've had my own business for just over 2 years now as a sole trader. I had a friend who really helped me out in the beginning so I asked if they'd like to come into business with me which they jumped at the chance.

I already had the business running for over a year and I put everything into it myself financially and physically for the first year.

This friend didn't put any money into the business at all although they were on a low wage for the first 6 months or so till I could afford to pay them a proper wage.

I'm now having problems with this friend as they are off ill quite a lot through various health issues and their time keeping is atroucious too. I also suspect this same person has a problem with alcohol

I had never got round to setting up the partnership as not long after they started with me I saw a different side to this person. As it stands i'm still a sole trader and I told this person that I want to stay that way for the foreseeable future as I don't think I now want this person involved in the business.

They have gone and seeked legal advice and according to their solicitor I have to abide by the verbel partnership agreement. Is this correct even though i'm a sole trader still and haven't entered any contract with this person?

Thank you for any advice you can offer

 

[janey84]

Oh goodness I'm sorry I can't offer any of the legal advice you're after - I suspect it is quite a grey area, given as it was only a verbal contract so to speak. Was anything ever detailed when you both entered into this 'verbal contract' with regards to sickness, how the business would be run, expectations etc?

I'm sorry I can't offer any practical advice - but want to express my sympathies - I'm in pretty much the same boat, with a good friend helping my work my current business - who seems to be ill about 75% of the time! I could have written the first part of your post myself!

 

[arcon5]

A verbal contract is just as valid as a written one, difference being though its harder to prove what was and wasn't said in the case of the former.

'You said I was coming in as a partner'
'No I didn't, I asked if you wanted to work with me as an employee'

You get the point.

Problem is, if your retracting from the original agreement, did you register for PAYE and make correct deductions, meet NMW, submit returns etc. Did you issue employment contracts. In case he turns around and says you've underpaid me for the last 6+ months or something. Or if he's off due to illness now claims SSP or claims discrimination or something equally crazy.

 

[The Resolver]

Arcon is right about verbal agreements. It means that the outcome of any legal proceedings will be up in the air and dependent on how the judge views the evidence from both of you as to what said and done etc.

Of course as in any partnership agreement it can be informally terminated but you have to be careful that doing that, admit s to the partnership in the first place!

Disputes based on verbal evidence and recollection are obviously ideal for mediation. You should respond by suggesting mediation any way so as to increase the risk for him of issuing court proceedings. The reason is that court rules require parties to not refuse mediation without good reasons ( I cannot see how any good reason could be put up in such a case as the one here) and if they do they may be punished by either their not obtaining an order that their legal costs be paid even if they win, or, worse, being ordered to pay some of your costs.