We all know relationships are tricky. In the horse industry things can get messy where it’s common to mix friendships with business. Understanding what a partnership means may be the most important step you take when “going in” with a business acquaintance, friend, or even a deliberate second party.
Which of the following may constitute a partnership?
Scenario #1: You buy a horse, and your trainer trains and shows him.
Scenario #2: Two breeders share a broodmare; each has a foal from the mare every other year
Scenario #3: An owner sells shares of a stallion to several other people
The answer: All three.
In my experience as an equine attorney, I have found it all too common when an individual in the horse industry believes they have relationship with another person when they are in fact in a legal partnership. Unfortunately, most do not realize this until the “relationship” begins to dissolve and issues arise. And, it is only then that equine law firms and horse attorneys are contacted.
In California, the California Uniform Partnership Act of 1994 governs partnerships. According to this act a partnership can be formed whether or not the persons involved intended such a relationship. All too often two or more individuals combine their money, property or time to purchase a horse without fully taking into consideration who will have explicit control over decisions involving the care and keeping of a horse including vet care, training, show participation and boarding.
When to get an equine law firm involved
I cannot stress how valuable it is to get a California law firm equine attorney involved from the beginning of any horse relationship. Having a written equine partnership agreement where all the details are spelled out – down to how the partnership will eventually be dissolved is of the utmost importance. Oftentimes a horse attorney can limit your personal exposure to liability from the actions of other partners.
I think I’m in a horse partnership – now what?
If you believe you may already be in a horse partnership, contacting a horse attorney is a wise decision. An equine law firm can advise you on decisions such as the possibility of converting the partnership to a more formal entity such as a corporation or LLC in order to limit liability.