If my business partner dies, am I responsible for his debt?
I am in a contractor/construction business w/my stepfather. Our agreement was that after we pay the employees/workers, whatever money is left over we split. He gets 60% and I get 40%. We equally share in the business bills like workman's comp, lumber and hardware debt, etc. My stepfather was in charge of paying the bills. I gave him my share to take care of it. I recently found out he has not paid any of the bills in at least a year. He has been diagnosed with brain cancer and has been given 8 weeks to live. After he passes, will I be responsible for all his business debt?
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I am not saying this to be flippant. This is a serious situation that needs to be handled properly. Doing it yourself will only dig this hole much deeper.
Kind of an important question, from the sound of it. First you're asking total strangers on the Internet. Second, we have no idea about your local laws. Is your "agreement" in writing? How are you part of the business, and what type of biz is it? Corporation, LLC, etc.
Really, you need to buy an hours worth of a local lawyers time. Take whatever information you have. You better do this fast too!!!!!
Find a good lawyer immediately. Maybe he can get something done before he dies.
It is possible that his share would come out of his estate or maybe someone would have to put a lein on his estate. It is possible that you would be responsible for his share of the bills. A lot depends on the laws in your state.
I am not a lawyer, but I know you need a lawyer. The sooner the better.
Spending a little money with a business attorney is your best move. Much will depend on your business structure. If you are registered as a partner or LLC member, you may have some responsibility. If it was all in his name, perhaps not.
That's one of the reasons partnerships are not the best business model to limit risk. You should be able to come out of this OK though, as long as your business is sound, but it'll take some time to become profitable again.
You are responsible for anything you have signed for....material accounts, joint accounts, taxes, payroll, insurance etc...if he filled out the paperwork and all is in his name, then legally it's not your bill. However if he owes monies, and has been giving you a share of the profits/income, court proceedings can request the monies back from you.
This is how I understand it, but you look for solid advice from a lawyer. You may be able to get free legal support, call the court office, attorney general, and ask where you can get legal advice for free.
Way it usually goes. Unless your written agreement states otherwise.