NSW Commercial Law - Are Business Partners Required to Pay Me Out?

[Mr Chris Lyristis]

Hi

I have partners in my company. I own 50%. The other two own 25% each. I have recently decided to leave the company for $100.000 plus profit and inventory in exchange for the remaining 50%.

The business is doing quite well and they are on a good wicket. The business is able to fund my payout, but they will have to borrow from the bank and might have to give some guarantee like their houses. These guys tend to go quiet and hopefully it will just blow over and be forgotten.

Do they have to pay me out under Commercial Law? What do I do in this case?

Thank you

 

[Rod]

Do they have to pay me out? what do I do in this case?

No. In the absence of a formal written agreement (either a shareholder agreement or post formation agreement) the business may have to be sold and the profit distributed by % shareholding.

 

[Tim W]

You don't have partners in a company.
What you might have is shareholders in 50% (you), and two tranches of 25% (them, each).

Which is it - company or partnership?