Help required

[hugmarod]

I would be grateful for any advise on a problem a good friend has with the failure of his business, I will try to keep it brief and to the point....

Basics are his business is in financial difficulty due to Thai business partner shall we say over spending etc, he is in a business partnership but not a limited company. I believe there is still around 3 years left on the lease of the store. There has been a lot of animosity and threats from the Thai partner now my friend just wants out,

Questions are basically

If he walks away from the business and returns back to the uk what legally would he still be responsible for

Should there be debt left in Thailand would he be still be traced to pay even though he would be out of the country?

I hope some one could give advice and thanks in advance

[Sunbelt Asia]

Depending on the kind of partnership your friend entered into, ie a Limited Liability Partnership, an ordinary Registered Partnership or an unregistered Partnership your friend's liability in the business still remains even if he were to walk away.

Firstly, there are three kinds of partnerships, each with different liabilities:

1. Unregistered ordinary partnerships; partners are jointly and wholly liable for all obligations of the partnership.
2. Registered ordinary partnerships; once registered the partnership becomes a legal entity, separate and distinct from the individual partners. Partners with unlimited liability are liable for all the obligations of the partnership without limitation.
3. Limited partnerships in which liability is limited to only the amount invested in the partnership;
   

If a creditor files charges against the partnership the courts could either force it into reorganization or into liquidation. They can still go after the assets of the other partner up to his liability assuming it was a Limited Liability Partnership. The liability for the partnership ends two years after the partner leaves.

However, it is important to note that if the majority partner commits a crime by talking out a bank loan knowing the partnership was in trouble or wrote a bad check then the other partner's liability can exceed the amount invested and is not limited to the amount of money invested in the business.

If your friend chose to leave the country without dissolving the partnership he could find himself faced with difficulties on his return should his partner leave the business with liens or debts.

[sunbelt][/sunbelt]