How to exit a partnership without partnership agreement

I want to exit a 50/50 partnership and do not have a partnership agreement. He refused to let me sell my shares to a third-party, and suggested to buy me out with a payment plan that is more than one year, which does not include any interest nor inflation. Now after we agreed, he comes back and refuses to buy me out. Would I be able to get back my initial investment at all? Do I have the right sell my shares to a third party without my partner's agreement? Is there anything I can do on my end and what are my rights under the partnership act.

Asked over 3 years ago in Ontario
Categories: Business Law

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Mike C Stewart, P.Eng

Answer by Mike C Stewart, P.Eng

VerifiedBritish Columbia lawyer

Since you have no partnership agreement, the partnership ends when one of the partners (you) decides to exit the partnership. You do not have "shares" in a partnership and you cannot sell your interest.

You and your partner have an equal right to all of the partnerships assets, and you are equally responsible to pay the debts. If the assets are worth more than the debts, then you and your partner must split the net assets 50-50. If your partner refuses to do this, you can sue him.

Posted over 3 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Mike C Stewart, P.Eng, or search the Lawyer Directory.

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