What about property that was solely owned prior to the partnership?


5

Thinking about dissolving a partnership - while the business idea is solid I have no doubt I can recreate the product, under another name, and be just as successful.

However, one of the main things that help start this business was my contact/emailing list that I had for several years prior to even discussing this business with my "partner" - and which list I maintained, by myself, every since.

If I dissolve the business do I get to keep this property that belonged only to me prior to starting my partnership?

Partnership

asked Nov 15 '12 at 13:22
Blank
Calais
51 points
  • depends on the agreement between you, and the laws if the agreement is silent. – Littleadv 11 years ago

2 Answers


1

Did you have an IP agreement or contribution? The problem is that customer lists usually fall into trade secret category and once shared, it is hard to surrender (see leap-frog doctrine). There are 3 possible negotiating postures

a) as asset you brought as intangible partnership contribution, you get to keep all changes so there needs to be a non-compete agreement where not-approach anyone on client list for a fixed period of time (depends on jurisdiction on what is normal)

b) treat as compensatable item, the partner pays a fair market value for continued access to the list

c) as joint property if it has been significantly expanded during course of business dealings, then the trade secret becomes part of the firms asset and you both take a copy or split the nameslist. Recreating the idea under a different name however may come down to unfair competition in some jurisdictions or not dealing in good faith.

Breaking up a partnership is not easy as there may be conmingled assets. There are ways to resolve this using either Russian roulette or Texan shootout. It comes down to how amicable the dissolution is and whether partners are prepared to be professional adults about it.

answered Apr 30 '13 at 16:14
Blank
Drllau
501 points

1

If you didn't contribute the list to the business as a capital contribution, sell it, or give it to the business it is my understanding you still own it.

If you gave it to the business then I expect it will need to have a fair market value placed on it and split, unless your operating agreement says otherwise in the partnership dissolution section.

If the transfer isn't documented (in your operating agreement, meeting minutes, email, etc.) I expect it will be hard for your partner to prove it was given to the business.

answered Nov 26 '12 at 03:41
Blank
David Silva Smith
180 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Partnership