Yep, get counseling. And one of the things you are going to be forced to accept is that in our "at will" world, employers, and supervisors can treat you as well as you will accept being treated. There is no school, no government, nobody in the world to protect you from somebody who is out and out bullying you. First of all, in this situation, where three partners control the business, and they've apparently bought into the nasty self serving supervisor you have here, my only advice is GET OUT.
There is really nothing in place in your business, it sounds like, to control the behavior of this supervisor. So stop looking for it.. Do not get really down, as you said when you contacted the lawyer and were told that nothing this jerk is doing is really illegal, that's about the way it is. Doing better, going elsewhere is the name of the game. Get away from this horrible situation before you flake out completely.
Nothing you do will make a difference in this person. the company has placed their faith in this person, apparently, and what you can do, as a literate, competent young person is GET YOURSELF FREE. Fifty ways to leave your lover is nothing compared to the fifty ways you can get away from this fellow. Okay, the worst he can do to you is talk mean to you, talk nasty to you, say things that are terrible, in your eyes. Okay. So what? You don't buy his lunch. So what? He says nasty things to you. So what? The way not to be labeled "that guy" is not to take offense, ignore what this stupid jerk says. At least until you get that better job.
If he can cause you to have a nervous breakdown, he's happy. But really, what he says is just words. As you have been told, it's not illegal. It's just somebody who has decided to push the envelope of nasty and bullying, and being obnoxious until at some point, someone tells him to shut up, doesn't pay any attention to him. Just let the chips fall.
As Shadow has pointed out, not only do you need to be seeking other employment through the VA programs, assistance with the whole issue, counseling, etc. is available to you through the VA. Please take advantage of it. Best of luck to you.