income from partnership stopped

C

camperman

Guest
Hi,

I have been a partner in a business for 18 months, it's a partnership with myself and one other person, the senior partner has told me that I cannot draw anymore wages from the business with emmidiate effect, this leaves me without an income, what are my rights?
 
What does your partnership agreement say on the matter of remuneration, and how come you have "junior / minor" partnership status?
 
18 months ago, I was asked to become a partner in a sales business and we verbally agreed that I would be paid a weekly amount of €400 (I had to run 90% of the business for this), plus I got a 30% equity deal in the business, the 30% equity was gained when the value of the business was over the starting balance at the time I started.

My partner simply told me that as sales were not happening, he didn't want to see the equity dwindle and as such stopped paying me the €400 a week income.

I am wondering if he has decided to do this, can I insist we liquidate the business, I see no point in being a partner of a business that I no longer get paid for.
 
I think that both of you need to sit down with your accountant and look in detail at the figures; however I would not be in partnership with someone who treats me in such a high-handed and arbitrary manner.
 
This sounds like you were hired as a manager to run the business.You were paid e4oo a week and got a 30% equity in the business as an incentive to increase the sales.Remember this was also a verbal agreement you said.

Now times are tough this guy has had a change of heart.Did you invest any money in this business..? Are you down as a shareholder in the companies office..? Do you have any legal claim to this business..?

If there is nothing in writing and without the above you may be fighting a lost cause. If however, you are a shareholder I would consult a solictor straight away. A golden rule in business get everything in writing.
 
camperman said:
...
My partner simply told me that as sales were not happening, he didn't want to see the equity dwindle and as such stopped paying me the €400 a week income.

I am wondering if he has decided to do this, can I insist we liquidate the business, I see no point in being a partner of a business that I no longer get paid for.
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I empathise with you in the circumstances, but if I were your boss and if "sales were not happening", I'd be inclined to take action against the sales force too.

Who did the business valuation at the start and what value was placed on the business, who was to do the business valuation after the agreed period, what targets were agreed and how were they met?

If you have all these measurements diarised contemporaneously you might have a case to fight, otherwise I think the bad news is you've been sacked.
 
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