A question for yard owners if they run the yard as a partnership

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Vix1978

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Hi,

Hoping someone can help here. I currently run my yard with a business partner, but things aren't working out for various reasons. Therefore I seem to be faced with 2 options - (1) go solo or (2) find another partner.

My question to all you guys on the forum is: has anyone ever found themselves in this situation, what did you do and how did you go about it? Questions that spring to mind are "did you buy your original partner out (reluctant to do this as she has invested no capital), did your new partner make an investment in the business/buy a share - if so what was this based on. And anything else that seems pertinent! I do have a partnership agreement in place, but that largely covers roles and responsibilities and termination periods - but not amounts.

Thanks all in advance for any guidance - my brain is tying itself in knots about this!!
 
I would suggest that you get an accountant to do a valuation of your business and a surveyor of the value of your lease/stables. You then know how much it is worth.

Provided your partner is prepared to sell you can either buy their share or find another partner to buy it.

Be aware that there may be a capital gains tax liability on the sellers share.
 
Was in this position 18 months ago, decided my best option was to close the business as it was a break down in a personal as well as a professional relationship and I was close to break down. Did look into getting someone to buy him out but valuation was going to be difficult and something I knew he would dispute.
 
I used to have a partner (we both invested capital) but we had a clause in our partnership agreement that if 1 of us wanted out they had to offer it to the other partner at market value. Unfortunately the idiot didn't realise what market value meant and spent several months trying to bully me into putting it up for auction. Needless to say I dug my heels in & won my point before it went to court. I am now sole owner.

If your current partner put no capital into the business and you can show that then you only have to terminate your partnership. The other person may be entitled to a share of any income/capital generated. I would make them an offer & see if they took the money & walked (saves a lot of headaches). If they refuse to go you will have to legally terminate your partnership. What ever route you take make sure they sign some documentation so as you are not liable for any debts the other one runs up.

Above all remember it is business & not personal!
 
What exactly has she contributed and taken out? Also what about any property that is involved?

With regards to your Partnership Agreement, anything that is not in it will automatically default back to the Partnership Act 1890. It is worth considering that all property, rights and interests that were originally brought into the partnership for use in the partnership will be classed as partnership property. If she wanted to make things difficult this is where you could find things get expensive. It may be worth having a chat with a solicitor, maybe the one who did the orignal agreement to check where you stand.

Also, once you do split the partnership, depending what is in your agreement, the business will have deemed to have ended therefore an Accountant may be a good idea to check tax implications etc.

Finally make sure you have a public advertisement stating that she is no longer a partner. This will cover her as well as you.

Hope this helps a little
 
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