Family business

[Lucy77]

What is the name of your state (only U.S. law)? New York
So I started working with my father and my two brothers nine years ago with the agreement that me and my brothers all own 20% each and my father owns 40%. Recently I have not been getting along with my father and last month he fired me and told me I own nothing, on paper he only put me down as 1% actually it was 1% each for me and my two brothers and he has 97% but our agreement was always 20% for each one of us and 40% for my father, my father is the only one that put actual money into the business. Legally where do I stand can somebody help me? It can't be that after nine years I'm left with nothing??

 

[Zigner]

What is the name of your state (only U.S. law)? New York
So I started working with my father and my two brothers nine years ago with the agreement that me and my brothers all own 20% each and my father owns 40%. Recently I have not been getting along with my father and last month he fired me and told me I own nothing, on paper he only put me down as 1% actually it was 1% each for me and my two brothers and he has 97% but our agreement was always 20% for each one of us and 40% for my father, my father is the only one that put actual money into the business. Legally where do I stand can somebody help me? It can't be that after nine years I'm left with nothing??

You're left with 1% (maybe)

 

[adjusterjack]

Legally where do I stand can somebody help me?

Up the creek without a paddle.

It can't be that after nine years I'm left with nothing??

Oh yes it can.

What kind of "paper" are you talking about? What does it say? Who signed it?

Depending on the "paper" you might have 1% or you might have nothing.

 

[NIV]

What do you mean by "family business"? To me, it seems you mean all of you are working together in a business entity like a partnership, LLC or (S or C) corporation. 3/4 of those will issue a document to you at tax time listing your ownership percentage and share of the profit/losses. Were you getting 20% of the profits/losses on those documents in all of the years you worked there? (Plus any salary or payment to partners you might have gotten.)

 

[quincy]

What do you mean by "family business"? To me, it seems you mean all of you are working together in a business entity like a partnership, LLC or (S or C) corporation. 3/4 of those will issue a document to you at tax time listing your ownership percentage and share of the profit/losses. Were you getting 20% of the profits/losses on those documents in all of the years you worked there? (Plus any salary or payment to partners you might have gotten.)

It sounds more like a family "mom and pop" type business (e.g., hardware store, small grocery) where all family members work to keep it operating. The family members would be employees.

If correct, I agree with Zigner and adjusterjack. There might be little for Lucy77 to do but take what (if anything) is offered by the dad/business owner.

 

[NIV]

It sounds more like a family "mom and pop" type business (e.g., hardware store, small grocery) where all family members work to keep it operating. The family members would be employees.

If correct, I agree with Zigner and adjusterjack. There might be little for Lucy77 to do but take what (if anything) is offered by the dad/business owner.

If the OP (and siblings and parent(s)) are part owners and no other filings are done to change things to an LLC or Corporation, it is a partnership.

 

[quincy]

If the OP (and siblings and parent(s)) are part owners and no other filings are done to change things to an LLC or Corporation, it is a partnership.

We can wait for the return of Lucy77 to clarify but this sounds less to be a formal agreement and more to be a family agreement (kids will take over dad's business when dad dies).

Dad is the only one who has invested money in the business. Lucy has been "fired" from this business. This would leave Lucy77 with nothing more of the business than what dad chooses to give.

 

[Lucy77]

It is an LLC and on my tax return it does say partnership

 

[quincy]

It is an LLC and on my tax return it does say partnership

Your agreement needs to be reviewed in its entirety, then, to see if/how changes to the agreement are addressed (e.g., is there a buyout clause, dispute resolution clause). Generally all partners in a partnership must agree to changes in the agreement.

We cannot do personal reviews of contracts on this forum as contract-review goes beyond the scope of this forum.

 

[NIV]

It is an LLC and on my tax return it does say partnership

On the left hand side of the K-1s you have received, about 1/2 way down is an item for Partner's share of profit, loss and capital and then lists a percentage. What does your most current one say there? If you have any older ones, did the numbers change?