Partnership Trouble

[lola1979]

Hi All

Just looking for advice

A friend opened a business about 9 months ago - it was a partnership in which she and a friend invested 15K each. Basically the business isnt a huge sucess and my friend is thinking of pulling out after the first year (as there was a get out clause in the contract), her friend however is determined to stick the contract out for the remaining 2+ years. Will my friend loose her 15k investment as there is little money in the business at the moment? The investment was for equipment, rent in advance etc.

Thanks in advance,
Lola

 

[Satanta]

Will my friend loose her 15k investment as there is little money in the business at the moment?
......
(there was a get out clause in the contract)

What does the "get out clause" say in relation to this?

 

[Brendan Burgess]

It really depends on how the get out clause was worded.

I think if your friend wants to get out, and her partner wants to continue, then your friend should shoulder the loss of her €15k. A year is a very short time to see if a business is successful or not.

Brendan

 

[extopia]

If there's little money in the business there's little chance of you recovering your investment unless the other partner buys you out. Have you explored this option? If the other partner is bullish about the business they might jump at the chance.

Whether or not you can force a liquidation of the partnership's assets to get some of your money back depends on the contract, I guess.

 

[Stifster]

The partnership agreement must not have been very detailed if this scenario isn't catered for.