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Partnership question

  • 07-03-2012 12:41am
    #1
    unir1916
    Registered Users, Registered Users 2 Posts: 78 ✭✭


    Had a discussion with a pal of mine tonight was looking for some feedback please.Ok 2 people set up a business partnership putting say 50,000 each into business. All goes well for 5 years and business earns 10,000 profit each year which they split. In the sixth year it all goes wrong and the company owes 10,000 to the bank . The business closes but 1 of the partners pays 5000 back to the bank to cover his share of the loss, but the other partner refuses to pay his share saying he can't afford it and has no assets is the first partner now liable to pay the the second partners 5000 debt???hope I have explain this right as you may be able to tell iv no legal or business experience but would be grateful for any feedback


Comments

  • #2
    McCrack
    Registered Users, Registered Users 2 Posts: 2,984 ✭✭✭McCrack


    Partners are jointly and severally liable for any debts owing by the partnership unless you both decide otherwise when you enter the partnership.

    You will need a partnership agreement drafted and your solicitor will advise you on such eventualities.


  • #3
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,492 ✭✭✭✭Marcusm


    McCrack wrote: »
    Partners are jointly and severally liable for any debts owing by the partnership unless you both decide otherwise when you enter the partnership.

    You will need a partnership agreement drafted and your solicitor will advise you on such eventualities.

    Even if you decide otherwise, that will not matter much in the event of default or non performance by one of the partners; i.e. the creditors will be able to chase any and all of the partners for the full amount irrespective of the partnership agreement (provided not an LP Act 1907 p'ship).


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