Transferring of business

[Lissa23]

Hi,

OK so I do not know where I stand in this but hopefully someone can help me out. I started a small newsletter/web blog type thing (almost as a hobby with some potential in making money) for a niche topic that's specific to my local area. It took a few hundred dollars to build the design etc. I was talking to someone else who really wanted to be a part of what I had started. Now this went on for a couple of months and it was quite successful - it started to generate some interest and soon we were making a little bit of money through advertisements. Nothing big but still good from something that started off as nothing.

So because my business partner had strengths where I lacked and I had strengths where she lacked we formed a partnership. The terms of the agreement was stating that I am the sole "key person" with this project but she has the power to also make decisions when it comes to formatting the looks or whatever.

The last few months I had withdrawn from the project because to be honest it had exceeded my interest level. We had split the initial investment about 70% (me) and 30%(her). Now because I have started to drift away from this idea, she had asked me (because she still has the desire to keep going with this project) if she can take over ownership. She said she would pay me for my initial investment to take over the project - but would I be in a position ask her to "buy the idea" from me?

[BusinessAdviser]

You can demand for your 30% ownership whatever you want.

However, there are a number of issues that are a bit troubling, all of which could be answered with a partnership agreement.

Do you have a partnership agreement?

[Lissa23]

We do have a partnership agreement. It states that we both are able to make decisions or have the power to sign for our business however we are obligated to consult with one another first. Our agreement is very simple and it states that I am the director of the company and she is basically under me. In order for her to take full ownership of the idea/company I would have to sign off - I can't be "fired".

[BusinessAdviser]

I'm guessing you didn't have an attorney draft the agreement?

[Lissa23]

No we didn't.

[BusinessAdviser]

I know hindsight is 20/20 and it's always easier to be an armchair quarterback, but that's why you're in this little debacle. My advice would be to consult an attorney to figure out the best way to get out of it.

[freedom.project]

Instead of just getting out completely from a profitable newsletter/web blog, why don't you consult an attorney about a Limited Partnership.

In you case, you would be the limited partner. You are limited to your contribution of capital. You would also not be actively involved in the business of the partnership. You would just be an owner.

And your current partner would be the general partner. They would have a broad range of powers to run the partnership. The would also be personally liable for the business debts and claims. This would give you more protection than you currently have. They can also bring in more general partners.

*Keep in mind, I'm not an attorney. All this information is from personal experience.

[BusinessAdviser]

You'd have to have agreement from your partner to do something like that. Considering your partner wants full ownership, I don't see that happening. Consult an attorney.