Can she take the equipment?

Can she take the equipment?

"I run a business as a general partnership. My partner has told me that she wants to leave and take back half the equipment. Does she have the right to do this, given that I'll be continuing to run the business on my own and therefore need the equipment?

Anne, Versoix

A general partnership is formed by two or more natural persons who wish to operate a business in commercial form. It is simple to set up: the future partners simply enter into a partnership agreement that sets out the relationship between them, and then register the company in the Commercial Register. Unlike public limited companies, for example, it is not necessary to set up a share capital: all the partners make the same contribution, whether in the form of cash, property or receivables, unless the partnership agreement provides otherwise.

This type of company does not acquire full legal personality. In other words, under its corporate name, it can have rights and obligations or sue and be sued. However, it is not a legal person, so it does not constitute an entity independent of its members. It is therefore the partners who are jointly and severally liable, on all their assets, for the commitments entered into by the company. In addition, the partners, and not the company, are taxed individually on their share of profits, interest on equity capital and their salaries.

A general partnership may be terminated by a joint decision of the partners, at the request of a partner, if a partner leaves the partnership or, of course, in the event of bankruptcy. Partners who do not wish to leave may agree that the company will continue to exist, with the same rights and obligations. If the company consists of two partners, the remaining partner may continue the business, in the form of a sole proprietorship, by paying the outgoing partner a severance payment. The departing partner is not entitled to a distribution in kind, but only to a mutually agreed sum of money. In the event of disagreement, and if the partnership agreement is silent on the matter, the judge will determine the amount of the compensation, taking into account in particular the share in the company of the outgoing partner and the share in the profits to which he is entitled.

You will have understood that your partner cannot leave with half the equipment and can only demand that you pay a cash exit indemnity which you will have to determine by mutual agreement, unless the partnership agreement provides otherwise. If you are unable to reach an agreement, you can apply to the Court of First Instance in Geneva.