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Partnership issues

Hi everyone sorry to put this to writing but I need some feedback. I
have a very unusual problem. I have my own business and then there is
another business with a “partner”. I am supposed to be the talent and
he is the money man. Now after many months of sourcing we thought we
had a great place for a standard line of rings. That has fallen
through. Now because of this fallout I find myself in the situation
where my “partner” has said that I will no longer be paid for
sourcing. That when I find a good source then I will be getting paid
again. To me this sounds like slave labour. I don’t know I am going
to say no pay no way. I have my own business to take care of and I
am just getting headache after headache. And the final straw was when
I came back from a trip (showing the rings to prospective customers)
that I have been told that I will not be getting paid for the work
that I have done the past two weeks. I would really like to hear
what everyone has to say. I have to go into a meeting on Monday. I
have no contract with this partner, nor any signed agreement. I feel
that I should be paid at least for the past two weeks. Please I
welcome your questions and thoughts.

Thanks Willie


You leave a great deal unsaid in your question. By the tone of your
writing it sounds like you just want out.

I assume by ‘talent’, you mean you make the work (rings in this
case) and he pays for the materials, and costs associated with
getting them out to be seen and presented to potential retail
locations and the costs of the marketing materials?

Did you have an agreement where by this partner would provide you a
stipend for your efforts?

Would you explain your use of source and sourcing?


Cut and run. Cut your losses. Or stay and fight, but as you said,
you have a business to run.

This is why you need to tread very, very carefully with
partnerships. And have everything in writing, and a real partnership,
and a plan for eventual buy out. This is not just me saying this,
it’s Inc. magazine, and every business book out there.

Hard to Find Tools for Metal Clay

Ah the value of the print shop!! again, i find it fairly
unbelievable that professional jewelers, dealing with substances that
are as valuable as gold and gemstones and platinum etc, and invest
not only time but this fire of passion we seem to have about our art
and work is so carelessly left to verbal agreements…

Verbal agreements are valid to a point…the point of enforcing
them- a magistrate can hear verbal agreement s and render an opinion
Your option is seeking $2500.00 in small claims court ( 25 bucks to
file) or hiring a counselor to represent you- often a letter will do
it…got any friends with a law degree?Perhaps they will jot out t
note to your partner…My first question though is did you both agree
on a defined sum of money for the work?

Secondly, you can also seek to recover the costs of travel, per diem
expenses for each work day of the two weeks and incidental expenses
n addition to the legal fees reimbursement should you win. I’m rather
surprised with his being the money man that you did notget some funds
for the trip before leaving…If you are thinking you got screwed and
want reassurances from this forum you can be assured you have mine…
this guy sounds <>…i’m hoping you will sever tie with the
ex …After sending him an invoice, notarized, for your time and
expenses, !! tha invoice can be used to demonstrate non-payment, and
constitute’s fraud

I have no contract with this partner, nor any signed agreement. I
feel that I should be paid at least for the past two weeks. 

Trust me I can speak from experience on this one. The fact that you
have no contract means you are just plain and simply screwed here.
Even WITH a contract if you are involved with someone who has the
means and desire to be litigious you can be raked over the coals. I’m
not sure I understand anything about what’s going on with your
particular situation (you aren’t very clear about it in your posting)
but if I were you, I would run as fast as I could from any more
contact and treat it as a learning experience (I wouldn’t even show
up for the Monday meeting). Since you have another business you won’t
be left without any means to survive. Next time make sure you have a
detailed contract, written by a lawyer signed by both parties with
clear delineations on all aspects of the business including what
happens in the event of a “business divorce” (yes, that’s what
they’re called).

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140

When you say you are the talent and he is the money, it implies your
partnership agreement was he fronts the money and you front the

I think you should try to see things from his perspective. He won’t
make money until the completed items sell (and are collected upon).
The same holds true for you (if my above interpretation is valid).
You are each providing essential value to the cause. His contribution
is funding the biz(materials, overhead etc), yours is labor(I’m
unclear what ‘sourcing’ actually means. are you making or reselling?)
If he were to pay you before any income is produced he in essence is
now becoming your employer and would be entitled to the end result of
your labor(above and beyond the hourly wage, ie… the profit on
your labor), and you would lose your interest in the final profit. If
he pays you now and then again later he’s paying twice.

Imagine you had done this on your own, without a partner, you
provided both capital and labor. If you didn’t sell anything from
what would you pay yourself?

You were taking a calculated risk when you started this venture with
him. He was too. Is HE getting paid yet? Then why should you? I know
that sounds harsh but it wasn’t meant as a condemnation, rather a
clarification of the core issue. If both of you take risk, then both
of you share in the profit. If there’s no profit then you both share
the loss. He loses his money and you lose your time.

Perhaps you could have a frank but friendly discussion with him and
iron out a distinct program of responsibilities and compensation. You
should both go see a lawyer…not for a fight but to avoid one. Form
a legit company with detailed…details.

As for your travel expenses, that’s a very grey area without a
premade agreement.

I might ask myself if the potential payoff is big enough to overcome
the grief you feel now.

I’m certainly not an attorney but I’ve kicked around courts enough
to know that the burden of proof is on the plaintiff. Without a
written contract you’ll have a hard time proving anything. Then you
will certainly have lost your investment(your time so far) because he
will likely sever the relationship. Before your meeting distance
yourself from the situation, take a cold even handed look at things
and the answer may become clear to you.

Good luck.

My partner and I do have a contract that basically is written from
the article of incorporating an LLC, with a specific buy out
arrangement and if she leaves, that she can not compete with me for 2
years, in all contiguous states and provinces.

But she has worked for me for the last five years, bought her
partnership and she is planning on buying me out in 5 to 7 years,
which will make me happy.


You are right I am the maker of all the custom work. I am sourcing
for a manufacturer that will produce a standard stock so I can just
deal with the custom work. We have only a verbal agreement. I don’t
necessarily just want out, I feel he is not going about things the
correct way and that bothers me. He knows nothing about jewellery,
but lately he has been studying up on things. He wants a website to
sell the jewellery (no store) He had some crazy ideas at first and I
talked him out of them for several reasons. So I had my meeting this
mornng with this partner and I demanded that I be paid for the past
two weeks. Eventually he gave in and I will be getting paid. I told
him until I get paid I will not be doing any of his work. The
sourcing is being done overseas (Asia mainly) to find the type of
rings that he wants to have made and have a steady flow of them. So
I am back at square one. I have many rings to be returned as they do
not meet with his specifications and I am the only one that knows
how to return items. This is getting so mixed up and involved much
more than I had ever anticipated.



Eventually he gave in and I will be getting paid 

This is not a real solution to your problem. You need to get
something in writing immediately. You may get paid for the last two
weeks, but what about the next two weeks? Or the ones after that. And
why are you partnered up with someone who “had some crazy ideas at
first” anyway? I really think that based on what has already happened
you’re just asking to be screwed by the guy if you stick it out with
him, especially with no written contract.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140

Hi Willie,

I wonder if you really are in a partnership. When you say you need
to be paid for work done then it sounds like a trade relationship, or
an employer/employee relationship. In a partnership each partner
contributes something - in your case money from one and labor from
the other. Any income from the combined activity is then split
between the partners according to how the partnership is set up.
Nobody gets paid until the partnership receives some income.

If it is a partnersnip and you have contributed your share in labour
but your partner has not contributed his share of money as promised
when forming the partnership, then there is a reason to end the
partnership, or ‘grounds for divorce’.

You should step back and look very carefully into the legal
obligations you face when in a partnership; Google it and read up!
The biggest danger is that you can be persued for debts that your
partner incurred (in the name of the partnership) even if you have no
knowlege that he did so. The people persuing the debt only need to
prove that some form of partnership was in place, and that includes a
verbal or a casual partnership.

If you wish to end the partnership then you must inform every person
you have dealt with (in the name of the partnership) that the
partnership is ended, and that you will not be responsible for any
debts incurred after the date on the letter. You will still be
responsible for debts incurred by the partnership before that date.
It would be a good idea to get legal advice now rather than later;
the longer you leave it the more complicated it gets.

Regards, Alastair

When I was new in business I was approached by a gentleman who had a
supply of precious coral that he wanted set in gold. I set the coral
in gold as ear rings and pendants, he was the entrepreneur and sold
them through a high class gallery. He talked of even bigger higher
class outlets. Wow I would never have been able to do that. The items
sold quickly, I got paid and did some more and got paid again.

Next on the agenda was a big overseas exhibition. “All contacts are
in place and it’s ready to go, can you make up a whole bunch of
stuff, it’s going to be really big, with your craftsmanship and my
entrepeneural skills…you’ve seen how they sell in the gallery
at prices you never imagined, people are raving about them, the sky
is the limit”!

As I was figuring out how I could trust him and how to come up with
the necessary gold and put together a big stockpile, I mentioned his
name to a fellow jeweller. He knew the gentleman very well. His last
scam was to tour the jewellery shops collecting the scrap gold for
refining and then he disappeared with kilo’s of gold. Some highly
reputable jewellers were stung.

Lucky me, getting paid for the work was the set-up. Like falling in
love with a girl we can fall in love with a business prospect and not
see anything bad at all. He probably would have simply disappeared
with the lot, but as a determined partner he could have got my gold
and labor and also my business, house, and car.

Just be careful pardner: find out all you can about your bride before
you marry her; and even a de-facto relationship can be the same as