Partners can typically sell whenever they want

| Jul 15, 2021 | Business Law |

If your company is structured as a general partnership, your partner can sell his or her stake in the business without your consent. However, if this happens, you have the right to dissolve the partnership and ask a New York judge to oversee the distribution of the firm’s assets.

No one can be forced to remain in a partnership

A partnership is a voluntary association of two people who wish to work together to further their business interests. Therefore, no one can be compelled to associate with another individual against his or her will. However, a partnership agreement may prohibit an ownership interest from being sold to certain parties such as a spouse, child or outside corporate entity.

The new owner doesn’t become a true partner

If your partner does sell his or her ownership stake to an approved party, that party does not acquire any partnership rights. Instead, it merely acquires the right to share in the profits or losses that the company generates. It may be a good idea to speak to an attorney who is familiar with business and commercial law to determine the exact impact of a sale. Depending on how the partnership was structured, you may retain intellectual property rights after a partner chooses to exit the firm.

If you have any questions about your rights and responsibilities as a business partner, it may be a good idea to consult with legal counsel. An attorney may review a partnership agreement, buy/sell agreement or other relevant documents in an effort to help address your queries. In the event that a dispute arises at any point before, during or after the sale of an ownership stake, legal counsel may represent your interests in court.