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Dissolving a partnership, who keeps the name?
Anonymous2 views2 answers
I entered into a general partnership a few months ago. My partner and I could never come to a general partnership agreement. We also never completed the publications or created the bank accounts necessary to complete the business licensing. We filed a fictitious business name. Recently I've had trouble getting a hold of my partner and he is pretty much invisible in the business.
I trademarked the business name under myself as an individual. I also own the URLs and sites pertaining to our business under myself as an individual. No financial transactions ever took place with our business.
My question is, if I dissolve the partnership, who gets to keep the name and if it's me, what can I do to stop him from using the name if I reopen the business as an LLC or Sole Proprietorship?
By bypassing your partner and trademarking the partership name (whether you mean a federal TM with the USPTO or a state TM with the CA Secretary of State) and the URLs, you've exposed yourself to claims of breach of partnership agreement and breach of fiduciary duty by the partnership and your partner.
Since you intend to continue on with this business and your partner seems uninterested, you're best off negotiating a buyout/dissolution and forming a single person LLC to run the business. The TM, URLs, dba, etc. are all partnesrhip assets, and the partnership should own them and you should buy out your partner's share for their value at the time of the buyout (along with the value of the partnership itself, icnluding goodwill, etc.), which shouldn't be much since you haven't done any business.
A buyout/dissolution agreement can restrict his competition with the business, which is one of the few exceptions to CA law prohibiting non-compete contracts.
See a business lawyer for help working this out.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
I agree with Ms. Koslyn's answer.
I recently helped a client with a similar problem. First, we dissolved the partnership (please see the link below). After extensive discussions, we were able to negotiate an agreement by which my client obtained all partnership intellectual property and the right to carry on the nascent business in exchange for paying the other partner a percentage of any future earnings up to a maximum specified amount.
I hope that you will succeed in getting your partner to respond. In another client's case, the other partner never responded to the dissolution (thus the business could not be wound up effectively), so my client ended up resigning as an officer and a director and walking away. (There was not enough at stake to justify filing a lawsuit to wrap things up.)
Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.
