Southfield, MI asked in Business Formation and Business Law for Michigan

Q: Partnership withdrawal and contract debt dispute

If we started a buisness with 5 people and one of the partners volunteer to leave and just wanted what they put in and we oked that in the contract and signed it to be paid evenly between the last 4 partners and the after 5 months 3 of the partners paid there portion already but the last partners didn’t pay but decided after 5 months of signing the contract to be responsible for they portion decide to leave and withdraw and want they money back is the debt that they owe to the first partner there’s or do we all become responsible again after we already had a signed contract relieving the first partner and all 4 other partners agree to pay a evenly portion split 4 ways that what I need to know who responsible is it

1 Lawyer Answer
Patrick Duff
Patrick Duff
  • Grandville, MI
  • Licensed in Michigan

A: It will depend upon the language in the contract you signed to buy out the first partner. If the contract says each remaining partner is reliable for his/her own share, then you're ok. If it says the business is responsible as a whole, you may have to pay and go after the non-paying partner separately for his/her share. The bylaws may also has some impact on process, now that one of the remaining partners wants to withdraw.

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