Q&A. Recouping a business investment

Q. I went into business last year with a friend, and we both invested £5,000 into marketing and premises. We found out that we just couldn't work together and decided to part company, but she wants to continue to run the business alone. I would like my initial investment back but she says no way. What can I do?

A. This may be dependent upon what is contained in your partnership agreement. You may be able to dissolve the partnership and try to recoup your money this way. Another option would be to ask her to buy you out of the partnership, and therefore you would have your share of the equity acquired by her.

Unfortunately neither of these options guarantees that you will get all, if any, of your money back, this will be dependent upon the success of the business. It may be that you suggest that an investor needs to be found or a suitable replacement for you if she does not wish to continue as a sole trader. If your partner does wish to carry on as a sole trader she will need to consider restructuring the business as necessary.

Andrew Hornsby, Associate Solicitor

*This article was previously printed in the Stamford Mercury