When Business Partner No longer participates

Discussion in 'Growing and Managing a Business' started by latinofox, Dec 27, 2013.

  1. latinofox

    latinofox
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    I need some help with this situation. I appreciate any feedback.

    My friend and I became business partners about 5 years ago in California. We formed a Christmas Lighting company where we have employees decorate houses, businesses, and corporate parties for the holidays. I live in CA and he lives in Utah. We formed a general partnership with no partnership agreement :( (yes i know it was a bad move). Every year my friend moves down to CA and we do the work together and we share the profits. Everything was all good. 50/50 and we made sure we pulled our own weight.

    Now comes 2013 where my partner does not want to come to CA. If I decide not to run the business, we lose all of our customers. I decided to run it by myself this year. I did 100% of the work this year. I not only ran the business, but I also participated as one of the installers, who I would normally pay hourly. I literally did everything. Installed lights, did accounting, answered phones, set appointments, trained employees, did company shopping, EVERYTHING!

    My question is, is my business partner legally entitled to profits? Does he still receive 50%? Remember we did not write up any document that states what would happen in this situation. He is not even living in the state and we are arguing on how much money he should receive. He also feels I should not be compensated for the hours I put into the business. He wants a share of the profits because of all the work he's done the last 4 years making this business grow.

    Please remember that this business has no residual income. We do not charge a monthly fee for anything. We simply get paid to put someone's lights up and then take them down. Every year we have to go back and do all the manual labor over again. So in my mind he's already but compensated for the year's he's worked.

    This is a lot of info, so if you have any ?'s please let me know and I'll give you more details. And please respond if you know of any CA laws that govern this situation.

    Thanks
     
  2. RoseAb

    RoseAb
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    It's really hard to believe that your partner wants to get the profits when he didn't do any work this year. The type of business you have, the yearly work is what counts-much more than bring in customers.
    I don't know anything about CA laws but it seems to me he really deserves nothing. You might pay him a very small amount but whatever you do you might have future problem with him because will he every do anything more?
     
  3. amwarner

    amwarner
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    With no agreement it's a bad move ... ALWAYS have an agreement or contract ... however, with the situation you explained, I don't possibly see how your partner could want money or should be entitled to any percentage of the work they didn't do.
     

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