My business partner left almost 4 years ago but now wants a buyout. What are my options?
He never invested any money, I have been the only investor. We have no buyout arrangements, nor did we issue any shares in writing. We have a business that loses an average of 50,000 each year... and I am the only one putting money in to keep the business afloat. What type of power does he have over me? He wants a buyout but after everything was appraised, it showed we have negative equity.
To my understanding, you partnered with someone and he never worked with you or invested anything in this business venture, you say he left 4 years back but it seems that his name still on the corporation official agreement? What type of corp is this? LLC or Inc?
You have been working in this business and have also been operating at loss? If operating at loss for several years then why are you keeping this business? It's time to let go if this business losing money and you are working so hard to keep it afloat then there is no way for you to revive it, there is no sense to keep working hard on a business that is losing money, if for 1 year or maybe 2, then that's fine, maybe there is a hope but if you are losing $50,000 a year and its more than 1 year, then its time for you now to sit down and figure out a way to get out. There is nothing wrong with the fact that the business is not doing wrong, you have done your part and worked hard, you should spend this energy and the experience in managing a business elsewhere, maybe work at a company that can pay you a salary and forget about running a business.
For your business partner that never participated in this business, its all depend on what kind of partnership is this, if LLC or Inc then he must share with you the profit or loss, if you are operating at loss, then he has nothing, in fact, he may need to contribute to the loss, if equity is negative then he needs to participate in this. You will need to talk to a lawyer to get out of this.