Can I dump my “partner” if the business concept was entirely mine and it was never incorporated?
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Can I dump my “partner” if the business concept was entirely mine and it was never incorporated?
I would like to move forward on developing a business that I conceived, but then then verbally “invited” someone else to join but with whom I no longer wish to formalize the partnership with. Both the creative and concept/basic functionality were mine. If I have to put a number on her contribution, it was probably about 25 hours of work of which I oversaw and/or participated at least the same about if timing. Do I owe her something or can I just walk away and open the business alone?
Asked on June 7, 2012 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If you promised her a share of the business in exchange for doing work, and she has been doing what she was supposed to do, you may owe her that share of the business; in most cases, an oral agreement is enforceable, so if party A is honoring her obligations, party B may need to honor his/her obligations, too. So in a work for ownership ("sweat equity") agreement, if party A does the work, party B may owe her a share of the ownership. Much depends on the specific discussions or agreement between you (e.g. what was said; how definite was it; etc.) and also on whether they may be any grounds for asserting that she is not in fact adequately honoring her obligations (e.g. is her work wrong or of substandard quality?).
Since the specific facts are so important, you should consult with a business attorney in detail about the situation before doing anything. One option to consider, to avoid any potential problems later: offer to pay her off for her work and for giving up any claims to the business. That is something else to discuss in detail with your attorney. Good luck.
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