Partnership Dispute

[thomas395]

My problem is that I was in a LLP and my partner needed to leave the partnership as he was getting a new job. His contract said that he couldn’t be involved with any other projects or businesses so I agreed to let him leave the partnership. The partnership had been set up with no partnership agreement but on the understanding of a 50/50 split in investment and of any profit/loss made. The problem is that before he left the partnership I had invested more money than him in he business and now he is going back on an agreement we had to invest equally.

I really need some help with this and appreciate any given.

 

[mahutchinson]

He should get back a percentage of the capital and any profits in direct relation to his original contributions. Therefore iif he contributed 40% of the capital, then he should get back 40% of the capital and 40% of the profits, less anything he has taken out of the LLP. Work out the exact percentages you and he contributed in the first place. Never set up any kind of partnership without an agreement signed by all parties with the contributions recorded as a schedule to it.

 

[Wildthorpe]

Partnerships are a sorrid affair, with hindsight you should have both signed a contract of some description which would have safeguarded you both from such a situation.

Since you had no protection of this nature, your partner is in his right to leave and therefore you are left holding the baby and the financial implications which you may face.

 

[mahutchinson]

Not true - the LLP Act applies in lieu of a partnership agreement. Even a limited or general partnership will come under the relevant legislation in those circumstances.

 

[thomas395]

Im an extreme novice in these matter. What does the last post mean.

Thanks in advance

 

[mahutchinson]

It simply means that where there is no partnership agreement the statute will apply in lieu. In your case it is the LLP Act 2000.