Can I quit as co-founder of my company and then recreate the company without my co-founder?
As my product has evolved my co-founder's skill set has become irrelevant. Furthermore, I've come to believe his efforts at this point are hurting our potential more so than helping it.
We are incorporated as a C-Corp each sharing 50% equity on a 4 year vested plan, each currently with 0% vested. We haven't made any profit.
I've offered to buy him out and continue as is but he's unwilling to budge. Therefore I'm wondering if I can quit the company and then restart it with the same business plan but with a new company/product name and entirely new IP.
Can I do this? I don't recall if I signed a non-compete, but if I did and he did also, can we legally come to an agreement to negate it?
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Try to come to an agreement. Explain to him that it is not working out, that you will buy him out and he can do whatever. Or that you would like to part ways and you would like to continue working in the same space on the same product. He is welcome to do the same. (unless you buy him out, then he should not compete / enter it) – Ryan Doom 12 years ago
2 Answers
Can you? Yes, can he sue with or without the non-compete. Yes. As partners the rule of law is a fiduciary responsibility to disclose what is relevant to the business. If you tell him what you are doing, I think its OK. You just can't be underhanded about it like saying, "just going to do something else now" then compete.
It sounds like your only way to get a good outcome here is to negotiate one with your co-founder. It is very hard to get a clear cut answer with legal matters as they are rarely clear cut.
Try and sort something out with your co-founder, it will be the best outcome long term, and will save you always looking over your shoulder.
