Help with business partnership hell!

My husband has had a business for many years and I reluctantly joined his company as a partner in the middle of last year, for tax purposes so he could pay less tax by ‘offsetting’ some monies to me. We have now decided our marriage isn’t working and we are separating. I told him yesterday we need to see the accountant so I can come off the partnership. His reply was that he’d already saw the accountant last week and took my name off and has in effect ‘closed the company down’ as he is going over to Limited. I asked him how could he take me off as I hadn’t signed anything and his reply was that I didn’t need to as effectively if there is no ‘him (enter his name here)’, then there is no business. 
Is this correct? Can he really take me out of the business, close it down and change to Ltd without me signing anything as a partner?
Brassic forever...


  • oldbikeblokeoldbikebloke Forumite
    1.1K Posts
    1,000 Posts Name Dropper
    yes he can and has, see last point:

    Dissolving a partnership where there is no partnership agreement

    In the absence of a partnership agreement, or where the partnership agreement doesn't deal with dissolution, the Partnership Act 1890 will apply.

    Under the Act, a partnership will be automatically dissolved if any of the following happen:

    • a partner dies or becomes bankrupt;
    • the court orders the partnership to dissolve;
    • it's illegal to carry on the business of the partnership;
    • the partnership was formed for a pre-agreed fixed term and that term has come to an end;
    • the partnership was created to do a specific thing or for a specific objective, and the project is complete; or
    • a partner gives notice to dissolve the partnership to the other partners. The notice doesn't need to state a reason and it can have immediate effect. This notice doesn't have to be in writing (unless in England, Wales and Northern Ireland, the partnership agreement was made by a legal document called a deed.)

  • Thank you for your help 
    Brassic forever...
  • tacpot12tacpot12 Forumite
    5.4K Posts
    Fifth Anniversary 1,000 Posts Name Dropper
    You have a risk here that you are jointly liable for the tax on the Partnership business and some of these liabilities won't be known until this time next year. 

    I don't know how you can protect yourself if he doesn't pay the tax himself, so I would discuss this with your divorce lawyer. Putting some money into escrow might be one option. The accountant should be able to confirm a suitable amount to go into escrow. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • Thank you for your reply. I am
    concerned about this and will seek professional advice.
    Brassic forever...
  • Mistral001Mistral001 Forumite
    4.9K Posts
    Tenth Anniversary 1,000 Posts Name Dropper I've been Money Tipped!
    Just a point.  If you are married, you are automatically in a legally binding partnership. 

    Another point is that some posters have assumed that you do not have a partnership agreement.  Is this correct?  If you do have a partnership agreement, what does it say about dissolving the partnership? 
  • Thank you for your reply. 
    I signed for a partnership at the accountants. I’m not sure if it was an agreement. Husband has since told me, as nothing had been paid into the partnership yet, he could just close it down and has at the moment reverted back to being a sole trader. He has told me he has paid £3300 for tax for 2018-2019 for me which inc 1k towards advance tax for 2019-2020. He has said I will receive a tax bill for July but to give it to him to pay. I suppose I can only hope he will pay it. I just don’t understand how he can come out of a partnership with no signature from me.
    Brassic forever...
  • edited 27 February 2020 at 12:32PM
    Mistral001Mistral001 Forumite
    4.9K Posts
    Tenth Anniversary 1,000 Posts Name Dropper I've been Money Tipped!
    edited 27 February 2020 at 12:32PM
    Thank you for your reply. 
    I signed for a partnership at the accountants. I’m not sure if it was an agreement. 
    Then you need to see that accountant and find out what exactly you signed.  If it was a partnership agreement, then it should have details of what happens when one partner wants the partnership dissolved.  If you cannot find out what you signed from him, then see a solicitor.
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