What do I owe my partner that just left the company?
I started an LLC. After a couple years of sputtering, I decided to get more serious about it, so I brought a partner on board. The idea was that this would always be a part time job that we did a couple nights a week, but it turned out to be much more than that.
We had a verbal agreement to get his equity stake to 25% after 4 years. It was to be 10% after year 1. This was before any money was put into the company.
As the company progressed, I put in another $25,000 - of my own money, we got another $19,000 from Kickstarter and the job started to become much more serious.
The number of hours that we worked over the following year were probably 3:1 or 4:1 in my favor. Then after about a year of him doing work, he decides that the commitment is too much and he is ready to leave.
The company is far from being profitable, yet, I still have a dream to turn things around and make it successful.
So my question is, what do I owe him?
He still thinks 10%, but I think less because I put money into the business and he didn't. But neither of us are experts on this matter.
If I continue to put more money in, it seems odd that he would own 10% right?
Your thoughts would be great. Thanks!
My partner left the business after he invested money and now wants it back. My business is 1 year old and I don't have the money to pay him back. I will make payments when I have the funds. Can he sue and access the business account and my personal account? We have a legal contract but there is nothing in it saying I ever have to pay him back.