Partnership Legalites

pclancy

Can anyone answer the following? Need to know pretty urgently and dont know who to ask.

If one of the partners in the business has PERSONAL liabilites can the person owed the money sue the company for the money back, even if the partner who ran up that debt did so before he entered into the partnership and began the business?

The person who is owed the money says he can sue the business and not just the partner even though there was no business when the item was bought. Do your personal liabilites become those of the business?

Does that make any sense?

Our man in Havana

Is the partnership a limited company? If so the person has no recourse to sue the business or you.

If your businness is not limited then your partner can be sued and take his half of the business. He cannot sue you.

pclancy

we're not a limited partnership. All we did was register the trading name and register for vat and tax as a partnership, also neither of us invested anything in the business so how will that work? We just got a small bank loan jointly. We've never signed any kind of partnership or anything.

Our man in Havana

Ok. The other partner can be sued and the person sueing could take his half of the business. You cant be sued.

Best you seek some compentant legal advice.

antoinolachtnai

You are probably not liable, but you should seek legal advice immediately.

Some unasked-for advice: partnership is a very dangerous and unsuitable structure for a small business (other than an accounting firm or law firm).

Antoin.

pclancy

would we be better off forming a company then and continuing to use the same trading name?

Our man in Havana

Originally posted by pclancy
would we be better off forming a company then and continuing to use the same trading name?

Yes

Best to form a company. The company needs then to register the trading name.