Removing a bad partner?
Two month ago I've joined with two friends to build a startup.
I came with the idea and we started working. Two weeks ago, the first partner left the project due to lack of time.
The second partner is not progressing with the project, postpones his tasks and so far seems to be great in giving original excuses.
We haven't signed a legal agreement, nor explicitly agreed on any kind of control/share division.
So far, the only funds placed into the startup is the purchase of the domain name. I've paid for it myself and it is registered to my name.
From day one I feel like I've been pulling this project on my own: design, development, etc.
I fear his lack of commitment will be the downfall of a potentially successful business.
My question is, how to remove the remaining partner from the startup?
Thank you.
Legal Founders Agreement Partnerships
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Take a look here: http://www.brightjourney.com/q/co-founder-turned-lazy-person-talk – Frenchie 11 years ago
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@frenchie Thank you for the reply. However, I could use some advise from the "legal" point of view. How can I claim full rights for the project and replace him without legal consequences in the future. Thanks. – Thedp 11 years ago
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Each case is too specific: talk to a lawyer, that's the best answer you're going to get IMO. – Frenchie 11 years ago
1 Answer
Important: This not legal advice . . . Get a Lawyer to help you - this a very common issue. Things to note: 1) The fact that you have not signed a legal agreement or expressly discussed on how to share control/etc is not really all that helpful for your cause. A "partnership" can be created by mere actions alone (which seems to be the case here), 2) while you may be able to legally oust an unwanted partner from a partnership (especially if they are not keeping up their end of the bargain/contributing to the partnership), your legal remedies are not always the best actions to take. From the limited facts, the best approach may be to simply approach the partner and offer to compensate him for his efforts so far (with cash) or strike some type of deal. Make sure you get a receipt! (i.e., make sure you have paperwork to account for his sale of any interests in the partnership)
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So you suggest to reason with him and not take unnecessary legal actions. It might work, I hope. What if I present an agreement at this point, and place myself as the inventor of the idea. With a section that specifically stating that I can force remove a partner who is not pulling his own weight? Thank you. – Thedp 11 years ago
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Important . . . This is not legal advice, always get a Lawyer to help you. It's not really clear to me what you are getting at; but one can make an agreement (for a partnership/LLC/etc) say almost anything they'd like, including a section of an agreement which gives a partner discretion to remove another partner for cause. With that said, I don't know of any people that would be willing to enter into a business venture knowing they can get booted at any point. Things to think about: 1) Hiring a person as an employee, 2)make a deal to buy out a bad partner, 3) take a person on as an investor. – Matt 11 years ago
