Getting rid of business partner

[dfghs1379]

I have a business parter that I want to get rid of for various reasons. We just started a company and he is flaking out on me and says he does not want to do it anymore but everytime I ask him why he just doesn't sign the company over to me he says no because he thinks I have some great idea to make to company successful that I am not telling him about and he thinks ill use it once he is not an owner anymore. I am thinking about just letting the LLC agreement expire (In the state where the LLC is registered there is a 300 dollar a year fee that all LLCs must pay to the state govt in order for their LLCs to stay active). He is so cheap he will never pay this fee and once the LLC is no longer active I can just register it in my name 100%. However, if I do this and the business is a success down the road I am pretty sure he will try to sue me for whatever reason claiming that he is still 50% owner. Would letting the LLC expire and then just re registering it in my name be the best way to handle this or is there another safer way? All answers are welcomed. Thanks.

[KristineS]

I would consult a lawyer for the definitive answer on this. If you have some sort of partnership agreement there should have been a provision for dissolving the partnership. If you don't have an agreement, a lawyer would be the best one to advise you about getting out of the partnership without liability.

[Business Attorney]

You definitely need to see a lawyer in your state to discuss this. The mere fact that an LLC dissolves doesn't begin to answer all the questions. What happens to the property of the LLC upon dissolution? Remember, things like trademarks, trade names, work product, customer lists, etc... may be intangible (you can't touch them), but they still are property.

You need to deal with the issue in a way that leads to certainty, not uncertainty and confusion. In the long run, that could be a very costly mistake.

[Steve B]

I had a really well written response to this earlier and must have gotten sidetracked and not hit "post".

Anyway, I was in a very similar situation. I ended up buying my partner out. I paid more than I thought I should have given his minimal contribution, but it was worth it to have a document proving that he was no longer part of any future aspects of the business. If this guy won't agree to a reasonable price for being bought out - maybe you can just walk away and start a new business - assuming you didn't have a non-compete agreement or anything similar in place.

[Businessfirst]

I have a business parter that I want to get rid of for various reasons. We just started a company and he is flaking out on me and says he does not want to do it anymore but everytime I ask him why he just doesn't sign the company over to me he says no because he thinks I have some great idea to make to company successful that I am not telling him about and he thinks ill use it once he is not an owner anymore. I am thinking about just letting the LLC agreement expire (In the state where the LLC is registered there is a 300 dollar a year fee that all LLCs must pay to the state govt in order for their LLCs to stay active). He is so cheap he will never pay this fee and once the LLC is no longer active I can just register it in my name 100%. However, if I do this and the business is a success down the road I am pretty sure he will try to sue me for whatever reason claiming that he is still 50% owner. Would letting the LLC expire and then just re registering it in my name be the best way to handle this or is there another safer way? All answers are welcomed. Thanks.

It sounds as though there is quite a strain in this business relationship. In these cases, it is usually best to part ways. However, you 2 should have a long sit down about future plans and if your visions differ too much, then I would expect a mutual break off. If he is not invested in the company and not willing to do any of the funding, I would expect it is possible for you to boot him legally. Of course, it is always best to consult a lawyer. A good lawyer is worth every penny in the long run.