Can I fire a business partner that has 33% of shares?
I own 66% of shares and my business partner has 33%. My partner promised big things and has failed to deliver on all fronts. He also spends 40 - 50 % of his time working on another business while myself & my wife work 7 days a week on ours. We are carrying all the debt to Family and banks, when he hasn't supplied $1. I need to oust this guy.
Yes, you can. Before you do, have a meeting and state that you are not happy with the arrangement and want to buy him out. Give the amount you think the 33% are worth and when and how you're going pay that. If that does not go well, fire him, get an attorney, dissolve the entity and start anew with no partner.
Yes, you can if he does not deliver on all fronts as you mentionned. In order to move forward, get rid of all those who drag you backwards. The sooner the better or else you will end up wasting lots of time, energy and most important your health.
It's depends on your agreement, but ground realities says that fire the partner,...
Is your business a C Corp, LLC or some other partnership. The corporate structure of your business and the state of incorporation, and your incorporation documents, be it by-laws, llc operating or partnership agreement, will determine what you can and cannot do as suggested by prior comments.
Review your partnership agreement with your business partner. It should have an Exit Strategy (or a section that discusses how you intend to deal with things when they don't go as you expect).
If your partnership agreement doesn't include that -- and he is a "partner" (versus just owning shares) - you can buy him out (or buy back the shares). If he is an employee with shares, you can certainly fire him and he can keep his shares.
And in the future - include an Exit Strategy in your business dealings.
Yes you can always do that.But before that please calculate as how much loss or profit you are going to make directly or indirectly.Always pro and con your options.
HI, I have looked these questions and it does bother me that there are few questions asked of you. Ultimately, there are some bigger issues and a right way of doing things depending on the facts that will avoid serious legal based reactions. If you want a serious answer and an actual strategy which is what you need then please contact me.
You can buy out a partner but his ownership as zero relevance to how much he works in the business unless that is specially covered in your agreement.
And your labor or dollars invested don't allow for you to demand anything that he didn't agree to do. I see a statement "he didn't work or invest $1" as sour grapes drivel unless it's a breach of contract.
All this is guesswork based on a lot of experience. Worthless if your written agreement says something else. I've guessed that you have a friend you tried to get work out of with a promise of equity. Regardless of your relationship with him, get something in writing and adhere to that rather than emotions.
Only if you or someone else buys his 33% share. Currently he's a co.owner and you can't fire him.
First off you don't have a partnership so there should be no partnership agreement. He is a minority shareholder. You are the majority shareholder so you can do whatever you please. You control the company.
Just remember the old saying "Hell hath no fury like a minority shareholder scorned" or was that about women? Try to keep it civil and offer to buy him out. Since you control the company it would be to his benefit to sell his shares to you. You always have the option of setting your salary high enough that there never are any profits to which he would be entitled to 33% of. Still it is better to get rid of him so you can retain earnings and build the company for the future. Going back to the fury part try to be civil and sound like you are appreciate of his help but are disappointed that he can't do more and really need to make the change. Since he has no money invested and no time invested he might be receptive to a minimal buyout if you handle him with kid gloves.
I do agree getting professional advice is a good move in this situation.