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business property question

(5 Posts)
SNOWBall4girlz Thu 05-Nov-09 17:30:02

quick summary

a friend and her brother bought a property half from a finance company half from personal funds remorgaged as a partnership

the bank account is in her name all documents are pretty much in both names agrements with suppliers etc are down as partners
the brother and agreed to split the profits 40 /60 and the building 50/ 50 but he has now informed her that the business is 100% his She thought she had bought half a business but her brother says that as she did not help with the refurb the funds were from a previous business but some are on her credit cards which she will get back.
both mortgages are being paid back even though the financed one is high

He said that the business is not half hers even though she is involved in the day to day running and does not take a wage and agreed to be a silent partner about big decisions and let him run it his way and leave the running of the business to the brother supporting him all the way
She assumed that the partnership meant that she had bought half the business they take decisions together and this is a big shock.

any answers or opinions thety are destined to fall out why would the brother agree to split profits if he had ot agreed that the business was a partnership too?

Aussieng Thu 05-Nov-09 17:37:35

I don't believe that anyone could give any meaningful advice on this without a detailed review of the documents.

If there is really a partnership (which is a legal person) as opposed to two people acting together there should be a partnership agreement setting out the allocation of profits and partnership capital.

Didn't she take legal advice when entering into this?

SNOWBall4girlz Thu 05-Nov-09 18:00:09

not really just assumed that all documents were signed as a partnership that she had bougt into the business as well as the property the deeds are in joint names as a agreements with sppliers have een set up as a partnership too she is a main contact for thtwo main suppliers and the business account is in her name only at the moment as her brother cound not get credit.

This is why you dont go into business with friends or family

SNOWBall4girlz Thu 05-Nov-09 18:01:02

atrocious spelling sorry sticky key board

Aussieng Fri 06-Nov-09 13:19:26

Totally agree with your friends and family point - although I have a small "business" with a friend and all is well so far but we have a small forest of paperwork so that everyone is clear about who owns/is entitled to what and in particular to note that we are NOT a partnership. It is not about if either of us ever acts unreasonably (although that could happen) but so that if one of us dies or becomes incapacitated everyone who is left to sort out the mess is clear too.

What do you mean by signed agreements as a partnership? Do you mean the agreements are signed in the name of a partnership ie expressly stated to be "Signed by X acting for and on bahalf of the Y partnership" or words to that effect or do you just mean that they were signed by both parties?

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