This question might sound dumb, but I'm at a complete loss of what to do.
My friend and I discussed starting a web site business years ago. For about a year and a half, we met every other weekend for a couple hours and brainstormed ideas of how to run this potential business. After the inital period, communications became more and more sparse. I e-mailed constantly, but he didn't respond. After almost a year of no response, I started to ask about exit strategies. He send back and e-mail saying that he would like to keep his shares in this fledgling non-company, but no longer wants to put any time or effort in it.
Here the things that were done:
Here are the facts:
I'm still interested in this business, but I'm not going to do all the work and split my profits with someone who is no longer part of it. Can I continue on with this project and assume he gives up his shares or just drop the venture completely? I plan to find a new name and domain, but I would like to use some of the ideas we discussed.
Any answers are completely appreciated.
I would draft up an agreement that outlines you are leaving "XYZ.com" and that your friend has 100% of XYZ.com can keep the domain, the website etc. It's 100% his. The outline would also say you are welcome to pursue this concept and market with a new company in the future if you want with no obligation to your friend or XYZ.com for any royalties, ownership shares etc. for any future products or concepts you make whether they were based on XYZ.com concepts or not.
Based on where you are in the life of this company and it's casualness thus far, something drafted by you between the two of you outlining the expectations should be fine. Give him everything you have thus far but make sure you have the right to pursue that market and use what knowledge you have gained while you were a partner at XYZ.com.
By giving him 100% he will probably sign off and you can move forward with the idea and build it how you want, with whomever you want.
I am not a lawyer, but I've been in a similar situation. First, I would advise you to consult an attorney about setting up a formal corporate structure on your own. Don't guess and most of the time it won't cost you a lot of money. Its unlikely your collaborator has any claim on the business, but laws vary by state and country.
In reality, there are no shares to be had at the moment as there is no corporation, no shareholder agreement, or any other legal structure.
Can you change the idea significantly enough to make it a different business? Its unlikely an untested idea will remain the same during your customer discovery and verification process. Changing the business from what you discussed would make it even more unlikely he would have a claim.
Sorry to be so harsh, but it seems like you haven't done much of anything yet.
if not a single line of code was written, the so called 'business model' you're developing is moot, the unique ideas mean absolutely nothing and the only physical progress you've made was when you bought the domain name.
You can simply buy another domain and apply the same business model to your non-existent project, you also have proof that the other founder doesn't want to work on it anymore, meaning he puts your fragile non LLC company in an even more fragile state.
I wouldn't think about it too much at this point, just build whatever it is you want to build, and because you didn't "kick" the other founder, it's quite moot.
Another +1 on seeing an attorney in your jurisdiction, because all of this advice will be trumped by the relevant law.
I am going to take the same page as above and recommend you send a letter, signed and dated, and make sure you keep a copy. I would include something like the following:
In addition to the letter I would discard, and in NO WAY use, anything you worked on prior to starting your new business venture. Dump any code, any graphics, any work on websites, business plans, etc. Do not let any prior work taint what you will do in the new venture.