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What debt does a co-president carry after leaving a company that continues to stay in business?
I would like to know if two people start a business, and run it, if years later one person leaves (under mutual agreement) if the person leaving has any obligation to accept any debt that is still in the businesses name, and for the business. The new 100% owner keeps the business open, does he have the right to demand that the former co-owner pay partial debt, but not to share in the assets earned prior to the co-owner leaving?
There was no agreement when the company was created, there is no legal department and the company consists of 2 owners and about 6 employees who wear many hats, one left (was kind of forced out) the company is still running and the other is trying to make the party who left pay for half of the outstanding debt that remains with the company as of mid september.
He is not dissolving the company, just trying to collect money to pay for the company's ever growing debt from a partner who is no longer with the company.
2 Answers
- shipwreckLv 71 decade agoFavorite Answer
It would depend on your agreement. The creditors might have a right to come after you even if your partner doesn't, if you signed an agreement to be responsible for company debt. A president of a corporation isn't always even an owner but often will sign to guarantee a vendor will sell the a company with no credit history. If you don't pay they will attempt to collect from the company or you.
You need to check with your company legal department or personal attorney or your company CPA. The company could have been worth less than nothing or why would you give away your half?
- Anonymous1 decade ago
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