Division of assets if a partner wants to take the company

Hi, There are two partners each of 50% in our company. An year back I(one 50% partner) bought a car on company's name and gave a sum from company's current account. I also paid half of the amount to the other partner by cheque to the other partner's wife account. The loan EMI are also dealt in the same manner. Half of the EMI amount is paid by me. Now, the other partner wants to take the company. 1. Can he also claim the same car in the total division of assets? 2. Is there a legal way I can prove that I'm using the car for my personal use and I paid half of company's amount to other partner's wife's account? 3. Is there a NOC/legal agreement that I can ask from him (which is legally bounded and accepted by court in case he claims the car in future)? Thanks in Advance.

Answers (4)

146 votes

off course there is legal a remedy of this issue, but here you should collect all the documentary evidence which can be prove/present before the court, i.e. your bank details and the statement of EMI towards the car it will be a civil suit, but be clear it will take some years to get the final decree, hence try to short out the matter out of the court to get the benefit immediately.

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303 votes

As per this query, a car has been purchased in the name of the company and cannot be used for personal use and if he aquired the company then the liability as well as loan could also be born by the partner who acquired the company and if not then through litigation and court case that will be done. For complete and accurate query kindly contact me if you think suitable .

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184 votes

Yes he can claim the car not as a whole though.
yes, you can ask him for a NOC/ or enter into a settlement agreement with the company and partner. It shall be a Tripartite Agreement among the you three for settlement of accounts. In the same it can be mentioned that the possession and tittle of the car be delivered to you.

331 votes

Why do you want to prove you are using the car for your personal use? The law on personal use of items brought through company funds is complicated and depends on circumstances of the case. Issues of tax, revenue, compensation to company are involved. You will open yourself to vulnerability by others who may not be of good intent. Other partner may claim part of the car since it was bought through company funds, you will then be required to give evidence of payment to him by you, and convince the court. Because the payment made by you can be for anything and because you made payment to wife and not company. All this is highly irregular and does not comply with the rules of Company law. You may ask for agreement from your partner but that is up to him and despite agreement he can still create above brought out problems. The MOU and AOA of your company will have to be studied for seeing clearer picture.

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