You still like your business partner, and the two of you get along, but it’s just become clear that they are not the right person for the job. You made a mistake when you launched the business, and now you want to cut them loose and either run the company on your own or hire someone else.
Can you force your business partner out just by firing them? Is that even an option? Here’s what has to be considered:
How did you set up your business?
There are options, but what they are is going to be determined by the agreements in place at the start of the business and other factors. Ideally, you created a partnership agreement. It can define your:
- Roles within the business
- Ownership percentages
- Exit strategies
- Dispute resolution tactics
- Legal rights
Since you both own the company, you may not be able to directly fire the other person. If you’re a majority owner, you do have more power, but what if you split things 50/50? That’s where your partnership agreement outlines how these decisions should be made and what you need to do.
For instance, you may actually have to buy out your partner’s ownership percentage. You can’t just fire them and replace them like an employee. The agreement tells you how much they own, and you can then have a valuation done to determine what you would need to pay them to take over as the sole business owner.
Navigating a complicated process
As you can see, it’s often very complicated to move on from a business partner, even when you know it’s the right thing to do for the company. It can help to work with an experienced attorney every step of the way.