Q: Can a business partner that was given POA by their partner for business purposes sell/give ownership rights away?
My husband and a friend opened a food truck/restaurant. My husband had some medical issues and gave the friend POA to sign business documents for them as they were in the middle of trying to purchase a building. My husband left the company (day to day operations) but signed nothing giving away his remaining 15% ownership in the company. The "friend" then removed my husband from the company (no compensation was given) and filed taxes as if my husband never had ownership. (1-1/2 years that he was there, and 1-1/2 that he wasn't).
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A:
No, a business partner with a Power of Attorney (POA) cannot unilaterally sell or give away ownership rights without explicit consent from the other partner. The POA typically allows the partner to sign documents and make decisions on behalf of the business but does not grant the authority to alter ownership without the owner's direct approval. Your husband retaining his 15% ownership means he should have been involved in any decisions regarding that share.
If your husband was removed without his consent or compensation, this could be a breach of his rights as a business owner. It's essential to review the specific terms of the POA and any partnership agreements to determine the extent of the authority given and if any violations occurred. Your husband might have grounds to challenge the actions taken by his partner, especially if there was no written agreement to transfer his ownership.
Consider consulting with a legal professional to review the details of your case and advise on the best course of action. This could include seeking compensation for the ownership stake or rectifying the ownership records. Ensure all communications and actions taken by the partner are documented to support your husband's position.
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