Team, I am taking up a existing business and while going through the old agreement found. This below point, do you see

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Customer: Hi Team,I am taking up a existing business and while going through the old agreement found. This below point, do you see any risk ?
I am share holder of 37.8Voting
49. In any vote required by the Partnership, the vote cast by each Partner will be in proportion to
Capital Contributions.
Answered by TJ, Esq. in 8 mins 1 year ago
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TJ, Esq.
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TJ, Esq., Expert

Hello and thank you for the opportunity to assist you. My name is ***** ***** I will do my very best to help if I can. It looks like you are referring to a document, but I do not see anything attached.  Can you attach the document or copy/paste the language that troubles you?

Thank you.

Customer
Sure, I will attach the complete document
Customer
That is old partnership agreement, So I will be replacing "Raghu". Do u think shall we add new clauses in the agreenment ?
Customer
agreement*
Customer
File attached (TM444V7)
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TJ, Esq., Expert

Hi again.  The first thing that sticks out is paragraph 11, which states that you would receive 34%, despite owning a share equal to Kumar.  This is fine if you are okay with it, but you should be aware.  Also, management decisions are made by a majority vote of the partners (i.e., 2 out of 3), but paragraph 49 indicates that votes will be based upon capital contributions.  This is a bit contradictory, and should have probably been worded better.  Also, each partner can bind the partnership (i.e., not 2 out of 3).  I assume you and Raghu have the consent of the other partners for this transfer (see paragraphs 31-35).  The remainder of the contract is fairly standard and does not have red flags.  I think you should clarify the voting issue, and perhaps ask that an addendum be included to clear up any misunderstandings.  The failure to be clear on issues like this is what causes fights, but also what causes costly litigation when the parties cannot agree and it requires a court to interpret.

I hope that helps.  Please let me know if you need clarification.

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TJ, Esq., Expert

It was a pleasure helping you today.

Customer
Thank you so much for the detailed explanation.
Have a quick question :
Current 3 partners have divided the shares according to initial capital contribution.
Currently Raghu's share is 37.8 and he purchased that for amount of 77500$.
If I purchase the 37.8% from Raghu at lower price than 77500$, how does this work ?
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TJ, Esq., Expert

Hi again.  The price you pay should have no impact on your share.  You are purportedly buying Raghu's interest whether you pay $1 or $1,000,000.  But you should be certain that the document you sign to make the purchase clearly states that.  Contract disputes that end of in costly litigation are almost always the result of poorly worded agreements that leave questions unanswered.

Customer
Sure TJ, thank you so much :)
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TJ, Esq., Expert

You are quite welcome. :)

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