New business Can this be started on a tissue agreement between 2 people (married)?
I.closed a business and pay all.my debt etc,, we have begun and business.putting it all in my partners name ( company owed by her) we have a tissue / napkin agreement to get a full contract agreement after 2 years, of which it has been 18 months but our relationship has gone way downhill that im concerned as im getting left out of alot of business activity , do u have advise as to my best next move thx Eug
Expert Answers
Sort by Date
Sort by Votes
Jan 22, 2021
… and this is reason #88 billion why you get every business agreement in writing, no matter who it's with. It's also reason #79 billion why you don't go into business with family if you can at all avoid it, particularly when there are no other owners who could potentially act as a buffer.
But those horses have both left the barn and are on a rocket ship to Mars. So let's talk about the present and the future, and not the past.
Gather up whatever proof of your agreement you might have, and any proof of your activity in the business, whatever it is. Cancelled checks, W2s, emails, incorporation papers if they include your name, a lease if it includes your name, etc.
Take it all to a corporate attorney. Tell him or her what you wrote here, and more. This includes what you do for the business, whether your role is customer-facing, etc.
Get ready to pay through the nose for this, particularly as the lack of a formal, written agreement is going to make your lawyer's job all the harder. And be prepared for your relationship to come to an end, although I suspect it's over already.
Could you work with your partner without bringing in a lawyer, to divide everything equitably? Maybe. But a lawyer will better protect your interests, and will know if you're being hosed financially. And this doesn't have to go to trial or even to the summons and complaint stage.
Hiring a lawyer throws a seriousness into the mix that should have been there all along.
Oh, and by the way, if you have very little proof, and/or your role in the business isn't too clear or easily replaceable, and you're not the idea person or a manager, and your name isn't on any significant papers …? Then your chances of getting anything substantial out of this are not too terribly high.
If you can't walk away with money from this, please, at least walk away with some lessons.