If I’m in a 3-way partnership, can 2 partners force the third out of the business?

Together we own a hair salon. The 3 of us each came into the partnership with $3000; we used this money we bought salon equipment, furniture, decor, etc. We split the monthly cost of running the salon 3 ways. We have no contract, no code of conduct or anything binding us. We have never even discussed what would happen of one day one of us wanted out of the busines. Do we have any rights?

Asked on November 14, 2015 under Business Law, Idaho


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

There is not enough information here to definitively answer your question, because the form of business organization (e.g. partnership; LLC; etc.) will influence the answer and you don't state what it is.
That said, because you say you have no contract or anything binding you, I will assume this is an informal partnership, not an LLC or anything more formal. In that case, they can force you out, but will have to reimburse you for your share of equipment, furniture, etc. (if they don't you could sue them for it) and also would have to distribute to you your share of any earned to date, but not yet distributed profits (and again, you could sue if necessary).

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