How to get out of a BAD business partnership legally

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This is Part 2 to How NOT to have a business partnership.

 

To recap:

Signed business partnership papers.

Found out new partner is a flake of the worst kind.

One deal blown already.

Now, how to get out legally.

This new business had already started to cost me money. I had reached the $3000 mark in no time and my business partner put on the poor mouth every time I tried to discuss his half of the bills and remind him of our agreement, which was that expenses were to be split 50/50.

We had set up a joint bank account in the name of the business and both of us had ATM cards and access.

After two weeks I decided to have a look at the account balance and was surprised to find several small withdrawals all over the town he lived in. They weren’t business expenses either! They were to places like McDonald’s, Baja Taco, In and Out Burgers, Whole Foods, etc. My business partner was eating his way through our account! I shut the account down that afternoon and left him a very stern message. He had whittled away at the account balance to the point that it didn’t even make sense to have the account anymore. The end of the year was coming and after walking him through getting the Tax ID number for the company, it was time to start talking about filing taxes for the year. I wasn’t looking forward to this either. The day he went to county office to file for the Tax ID number he made several calls to me in the process. I found that even the simplest legalese sent him into a tailspin and he had trouble understanding any of it. One of his numerous phone calls to me that day was when he was standing outside of the building on the lawn, in tears because he was so frustrated.

But tax day loomed, so I made the call.

Here’s all I remember about that call; Laughter and then a confession “Well, I haven’t paid taxes on my income in over 13 years. Why should we even file?

I hastily ended the phone call with him and immediately called my lawyer.

Her advice to me was “Get out of that business deal now, today, this minute!!

So I initiated the dissolution of our business partnership, that afternoon.

When I told him I was ending the business and severing ties, the nightmare began. He refused to sign the dissolution papers. So I had to start making a paper trail of my actions to prove that I was no longer in business with him. I saved emails and I sent Certified, Signature Required letters to his home.

He avoided all of them.

What he did spend his time doing was moving to Florida and sending me one convoluted storybook email after another. I was responsible for every bad thing going on in his whole life. Even today, when I think back to these outlandish accusations, I am perplexed. I remember trying to respond to some of them, but they were so ludicrous that I couldn’t come up with any logical arguments.

All I could do was sit there while he threw shit balls at me.

Then I got the email that basically sealed the deal for me. It was written on a Yahoo email account and was addressed and worded as if a lawyer had written it. I knew his best friend was married to a lawyer, so I deduced that she was probably just trying to help him, even though the email was not signed with her name.

The name she used to sign the email was completely false. I did a check on her through LexisNexis and found that she was not practicing law at the time either. I guess she had taken time off to raise her family. The IP address was definitely hers though because she lived outside of the country at the time.

I did some additional checking, and this email could be used as grounds for disbarment. That’s a pretty big risk to take when you haven’t heard both sides of the story. It was also something you should never ask a friend to do for you.

The bogus email was demanding that I turn over the domain name and the website to my former business partner, gratis. He wanted all of my work, for free.

If it had just been a regular website that might not have been a problem or a huge debt for me to absorb, but the website was huge. The videos we had posted required mega bandwidth, and that costs money. The design work and the consultation fees I enlisted in order to build this beautiful website also cost money.

Why should I have to give all of this to him?

After much reflection and talks with my legal counsel I decided that if giving him the website would make him go away, then that is what I needed to do. He had prolonged this whole process for months and it was wearing on my nerves.

So that’s what I did.

I emailed him the passwords along with some sound advice about putting his own friends in jeopardy in order to get his way. I informed him that his friend had risked being disbarred to help him and that while I had no interest in pursuing this, in the future someone not as nice as myself might pursue it.

I never heard from him again.

And he has never paid me back a dime that he owes me.

My advice to anyone considering a business partnership is to go above and beyond in your research before signing any papers. If your antenna stand up even a hair because of something you hear or find, heed your gut and back out. I thought the fact that we were not friends and did not have a personal history was in our favor, but it turned out that had I known more about him I would never have signed those papers.

Pick your battles wisely. Know when to throw in the towel. For me, giving up the control over a website that was never going to give me a return on my investment was totally worth getting rid of the twisted mind of my former business partner.

But the best advice of all that I can offer is to have an attorney.

My attorney saved me from a world of hurt and I thank her.

If you read something here that struck a nerve, make a comment. I’d love to hear from you. If you’d like to read more and just strike every nerve you own, consider pressing the Follow button on my home page and get notified every single time I bang on my keyboard. Thanks for stopping by today!

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About Madeline Scribes

A writer with a sense of humor. If anyone can laugh at life, it's me.
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5 Responses to How to get out of a BAD business partnership legally

  1. FloresColdz says:

    Man, really want to know how can you be that smart, lol…great read, thanks.

    Like

  2. Pingback: How NOT to have a business partnership | Spread Information

  3. Congratulations on having one of the most sophisticated weblogs I’ve come across in some time!

    Like

  4. Do you people have a facebook fan page? I looked for one on twitter but could not discover one, I would really like to become a fan!

    Like

    • madelinelaughs says:

      Yes we do! It’s brand new and you can find it by searching for Spread Information – Stop the Madness. We’ll look for you on there 🙂 All new posts are syndicated and post automatically to the Facebook page so you’ll be completely uptodate whenever there’s something new. Thanks and come back often.

      Like

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