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    4 Replies Latest reply on May 25, 2010 8:48 AM by Bridge

    Owner benefit being pushed back by partner


      I have a child care business, and have one partner. I started the business and during that time, since the partner was a close friend, I offered her to be a partner since I was the type of person who if I can be successful and help my dear friend, I'd do it. So I gave her 49%, me 51% just to maintain control of important business decisions. Anyway, the business has been very successful. Obviously one of the perks of running this business was I didn't have to pay for child care.

      The issue arose recently when I told my partner I would be putting my second child to the school. My eldest has been in the school for about a year now. Her daughter is there as well. She is telling me now that I should pay for my second child, since it would be unfair to her being that she only has one child. She is saying I'm getting an extra benefit that she isn't. And that the fair thing to do is for her to receive 49% of my 2nd child's payment. I said why should I be penalized for having 2 kids? No one is stopping her to have more kids and put them in the school. She has really become greedy about this, and is insisting business is business.

      It's interesting to me that I am majority owner but she is trying to push me around. Do I have the right to insist on this, and maybe use my majority control? What's your opinion?

        • Re: Owner benefit being pushed back by partner
          dublincpa Scout
          This is a common problem with multiple owners. I don't claim to understand the background between you two, but usually the partners see history differently. Neither of you is crazy. It just seems that this is something that wasn't thought through all the way upfront.

          You mention partner, but not the entity type. My initial response is to go back to the original partnership/operating agreement or shareholder agreement. I assume it was not addressed in the agreement.

          The next things is to see what your rights and the partner's rights are generally under the agreement. See who has how much leverage and then just work it out. There are lots of options to make this work without it blowing up.
          • Re: Owner benefit being pushed back by partner
            LUCKIEST Guide
            Owner benefit being pushed back by partner

            Who r u?? How important is this partner to you??

            Are you married?? In marriage there is give and take. Also in a partnership there should be give and take.
            When the give and take ENDS it leads to divorce or a break up of partners

            That is my opinion, LUCKIEST
            • Re: Owner benefit being pushed back by partner
              bpfinance Adventurer
              Do you have a partnership agreement/operating agreement/set of bylaws? Presumably, since you see "not having to pay for childcare for your own children as a benefit" this should have been addressed somewhere in the agreement.

              If it is not addressed, how are company decisions made? Is it just based on a simple majority? If so, and you really don't want to pay for your 2nd child's payment, technically, all you have to do would be to create a resolution stating that all children of partners get to attend the day care for free. However, this may upset your partner because obviously you are kind of strong-arming here, and your partner may think it's only fair that you pay for your 2nd child. I can't recommend this because obviously I don't know the details of your situation, and your relationship with your partner, I'm just letting you know what may be an option.

              If you have any questions, feel free to contact me:

              Jeremy Barfield
              Chief Forum Response Correspondent
              • Re: Owner benefit being pushed back by partner
                Bridge Navigator
                Your partner has a point but it really comes down to excess capacity. Is your additional child taking the space of a paying customer? If so, you should be paying.

                Why don't you both pay for your childern in the center? You for your two and her for her one.

                At the same time, raise your pay since you are now overseeing another child. I am sure this will offset the cost. I wonder how she will like going out of pocket?