A business partner left because he became too busy. He made a small contribution financially, but otherwise didn't attribute to the business. We haven't generated any income and he simply wanted out. Are his portion of shares valid without contract? It was a mistake on my part to not think of contracts, but does this work both ways? I'd like to still launch the business in a year and it would seem foolish for him to take a percentage of business that he didn't do anything for. Thanks.
1 Answer from Attorneys
What you should do is enter into an assignment agreement for some nominal consideration so that you memorialize his intention to relinquish the shares to you and no longer be a part of the business. There may be other considerations as well. For example, if it were his social security number on file as the Responsible Party for the IRS EIN then you will want to change that.
Before you jump in, I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.
If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.
Our firm is now referred by the American Bar Association (see under the New York section): http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
Related Questions & Answers
My client asked me and "suggested" many things to me manipulating me... Asked 7/08/17, 5:57 pm in United States Washington Business Law
I'm a lease operator of a food truck and both myself and the owner have lost the... Asked 4/19/16, 12:41 pm in United States Washington Business Law
My husband quit his job effective September 1. His company told him that due to... Asked 2/04/16, 11:35 am in United States Washington Business Law