Navigating the Challenging Task of Parting Ways with a Business Partner

When embarking on a business venture, finding the right partner can be a crucial factor in the success and growth of your enterprise. However, circumstances may arise where the once-promising partnership turns sour, leaving you in a position where continuing the business relationship becomes untenable. While parting ways with a business partner can be a complex and delicate process, there are several strategies and steps you can consider to handle the situation effectively and minimize any potential negative consequences. This article aims to provide insights into how you can force out a business partner when their behavior becomes detrimental to the overall success of the enterprise.

  1. Communicate openly and honestly: Before taking any drastic measures, it is essential to initiate a conversation with your business partner about your concerns and the issues affecting the partnership. Be clear, specific, and assertive about the problems you have observed and how they impact the business. This open dialogue may help your partner recognize their shortcomings and could potentially lead to a resolution that benefits both parties.
  2. Review the partnership agreement: Carefully examine the legal agreement or contract that outlines the terms and conditions of your partnership. It should outline provisions for dissolution, termination, or buyout processes. Understanding these clauses will provide you with a foundation for pursuing the necessary steps to force out your business partner.
  3. Seek mediation or professional guidance: If direct communication fails to address the issues or if emotions run high, seeking the assistance of a mediator or professional counselor may be beneficial. A neutral third party can facilitate discussions, help both parties understand each other’s perspectives, and explore potential solutions. Mediation can often help salvage the relationship, allowing for a more harmonious business separation.
  4. Evaluate buyout options: If you decide that parting ways is the best course of action, consider the possibility of buying out your partner’s share of the business. Consult with legal and financial professionals to assess the financial implications and determine a fair valuation for their stake. Negotiating a buyout can provide a clean break while allowing you to retain control over the future direction of the enterprise.
  5. Explore legal recourse: If all attempts to resolve the issues amicably have failed, and your business partner’s behavior continues to harm the business, it may be necessary to explore legal options. Consult with an attorney who specializes in business law to understand the potential legal avenues available to you. This could involve invoking clauses in the partnership agreement or pursuing litigation, if necessary, to protect your interests and the business’s viability.
  6. Protect the business during the transition: During the process of forcing out a business partner, it is crucial to prioritize the stability and continuity of the business operations. Take proactive steps to ensure that clients, suppliers, and employees are informed of the changes and that the transition is as seamless as possible. Maintain open lines of communication with stakeholders and work to mitigate any potential negative impacts on the business’s reputation or financial health.


While ending a business partnership can be a difficult and emotionally charged process, sometimes it becomes necessary when a partner’s behavior significantly hampers the success of the enterprise. By following these steps and seeking professional advice, you can navigate the challenging task of forcing out a business partner with greater clarity and confidence. Remember to prioritize open communication, explore mediation if possible, and consult legal professionals to protect your interests and ensure the business’s future stability.

Video Transcript

How Can You Force Out a Business Partner?

So here is a little bit of context for the question.

My business partner was great in the beginning, but now he is awful. I can’t continue to do business with him. How do I force him out?

This is tricky. Under the law, you can’t take away somebody else’s ownership of the business just because they can’t do the job. So here is what the law is in most states. When you own a small business, nobody can take away your right to ownership in the company, with a few exceptions for fraud and stuff like that. But let’s set that aside. So you own the company, but a lot of times, your ownership in the company doesn’t produce any benefit to you other than your job and the wages you receive from that job. So say, for example, you have two chiropractors, and they are 50-50 owners of an LLC. And if one of them is fired, they essentially lose the whole benefit they have in that chiropractic office. They would also stop working there, so it would probably generate less proceeds, but let’s just say that the main benefit of this small business is the wages you get from the job that you are able to work. So if somebody is fired, if a business owner is fired, they may lose all of the benefits of owning that company. Is that fair? The law has said, no, it is not. It is one thing for a person to be fired from a large, publicly held company like Apple, Google, Honeywell, Burger King, etc. But it is quite another thing. If a couple of business owners own a small business, they work in the business, and most of the benefit or the money they get is from their job. If you let another business owner fire them, you have essentially robbed that person of the entire benefit of owning a part of that company. So in small businesses, the law generally says you can’t fire them because that would take away their ownership benefit. Now, if you had a contract that said they could be fired, that is a different story.

What if There is No Contract?

But if there is no contract, the law says business owners have an expectation of employment in their company if that was given to them as part of their ownership of the company. So what are you supposed to do about this? If you can’t get along, well, here is one scenario. There was a business owner, and as he aged, he struggled with certain functions like using the computer, and that was exacerbated by the fact that the company continued to update its computer technology, and this senior owner had a difficult time learning the new technology and using it. And when this went to court, the judge basically said, “You don’t have a right to just fire this guy because he can’t do the job. You need to make reasonable accommodations for him. So, for example, get him an assistant who can help him with the software, and get him some training. And if he can’t do the job, find another job in the business that he can do.”

So I think the takeaway here is that when you go into business with somebody, you are often stuck with them. And so, it is really important to be selective in the business partners you choose and then also to have in writing an agreement about how you will separate later and how you will handle different scenarios. Those scenarios might be you don’t get along, you don’t agree with the vision of the company, one of you aren’t doing a good job, at least in the opinion of the other owner, a divorce, a bankruptcy, incapacity, an injury that takes somebody off the job. All of those pieces are what is usually covered in an operating agreement and a buy-sell agreement.

So when setting up an LLC or a corporation, you usually have agreements among the owners about how to handle all of this stuff. The operating agreement in an LLC is the same as a Bylaws in a corporation; it basically sets all the internal rules. And then one optional add-on to that is called a buy-sell agreement. And that is where one owner can buy out the other in scenarios like death, bankruptcy, divorce, somebody not doing the job well, or other disagreements that might come up. Unfortunately, business owners often don’t do that in the beginning because they don’t want to spend the money on legal fees. They are trying to prove the business idea first. They are busy growing the business. And so often, I see if business owners don’t do it in the beginning; it gets put off until there is tension between the business owners. And that can be a very expensive and difficult time to try to resolve differences that have arisen. It is especially challenging, too, because often when there are issues, trust starts a road, and resentment builds. And so now you have those emotional aspects causing conflict and distraction in trying to put together a kind of like a prenup or a framework for separating as business owners. So if you are running a business now or you have business partners, and you don’t have an operating agreement and a buy-sell agreement. Now is a great time to get that in place while you are getting along with the other business owners.


So can you force a business partner out if you are not getting along? No. Except if your contract says so, you can follow the terms of the contract. Or if you go to court, a court can dissolve a business and force the partners out or force one to be bought out for a fair market value.


All right. Well, thank you for joining me here today. If you would like more information on me, you can find it at If you would like to follow us on other platforms, just search for Aaron Hall, Attorney, on the various other social media platforms. And if you have other questions, I would be happy to see about answering them in future YouTube live videos. Feel free to add them in the comments below. It was great talking with you today. I hope this was helpful, and let’s stay in touch. You can sign up at if you would like to receive those exclusive training videos for people who are trying to avoid common problems in small businesses. Have a great day.