How do I remove a business partner who has become a detriment to the company?
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How do I remove a business partner who has become a detriment to the company?
My business partner has become a complete financial drain on the company. We started a company 50-50, yet he has taken almost three times as much as I have over the last 10 months. Additionally, our new company assumed a bunch of his existing maintenance contracts and our company has paid out all labor and other costs to complete these contracts, but the new company has never seen a cent in compensation. After constant questioning, my partner admitted to keeping some payments, but I suspect he has kept even more than he admits. Additionally, he has put himself into extensive legal trouble.
Asked on April 23, 2011 under Business Law, Virginia
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Ok so I am really hoping that you have a partnership agreement and that all of these issues were addressed in it. If your business partner is in violation of your agreement you have to use the remedies that are either listed in the agreement (some agreements call for mediation or arbitration) or if nothing is listed, then you need to sue him for breach of the agreement in Court. You will need proof of your accusations and may need to bring someone in to look at your books and bank accounts, etc. to assess what has been done. You will need to contact those parties that owned money and ask for proof of payment for services rendered (who is doing your book keeping? Him?) and start making your case. Get some legal help her. There are a lot off issues - including embezzlement - going on here. Good luck.
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