Hi

Myself and 2 other people have decided to open up a butchery,  we all agreed on paying R100000 each for start up capital, myself and and one other partner has already injected our capital...coming to qurbani time, the partner who has not yet paid agreed on buying sheep worth R50000 as part of his capital,  it was a verbal agreement and we agreed to it , he took the sheep on our company's name...after a while he has asked us to pay back the farmer but from our agreement we had we weren't aware to pay the farmer back...the farmer came to us and asked for the money back or he'll take us to court for stocktheft..so we paid the farmer back , but the business partner said he wants to leave the business,  and as for now we not sure if paying back the farmer was a good idea or was the business partner liable to pay , but now I don't know if was a good decision I made for paying back or was there another way around it, and as for the business partner he didn't sign any documents of agreement to the business but the business is registered with his name there and aswell on the business bank account  ...i was also worried to go to court because of the proof the farmer had that we sold the sheep and we also trying to get a grant for the business....what advice can you give me on this whole endeavor? 

Hi there and thank you for your question,

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Okay, so you (A) and your first friend (B) each put in your R100k. Then you used R50k of that to pay for the sheep which your third friend (C) arranged but didn't pay for. So (C) basically hasn't contributed his share at all. 

In my opinion, the two of you (A) and (B) paid for the sheep and you sold the sheep, hopefully for a profit. So you two should still have your R200k total. 

(C) paid for nothing, and has not received anything. So he can't expect anything. 

I think that you were correct to pay the farmer. 

What you need to do, urgently, if you are of the opinion that you can't have (C) involved in the business anymore, is to change your business name and stop using the old bank account. Open up a new bank account. Get your friend to transfer the money from the old business account into your new business account. Then cut your friend out of the business. 

Otherwise, if you want to give (C) a second chance, is to get your names onto the bank account so you can also transact on it, and then build up the trust relationship again, then continue with the business but know that you need to protect yourselves with a written partnership agreement! 

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Att. Patrick 

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