I own 75 percent and she has 25 percent (it's all in writing). She does not do her part in trying to build the business or basically anything pertaining to the business. I am frustrated about the situation. We have not made a profit and everything is in the beginning stage. Also, I have decided to change the name of the business from the one on our written contract. Please note she's my ex-wife and the mother of my two children (bad mistake).
If your partnership agreement contains the right provisions, you can purchase your ex-wife's interest in the business from her according to the procedure and valuation formula in the agreement (please, tell me you have them). If everything is in the beginning stages, this should hopefully not cost you too much. She needs to be told that this isn't working and that you'd like to buy her out. Speak to an accountant to determine the price and an attorney to draw up the necessary papers. In addition, if her interest in the business came as a result of your divorce settlement, make sure that your attorney has an opportunity to review the settlement papers to ensure that the procedure you follow to buy her out won't breach the terms of that agreement. However, if your partnership agreement does not contain these provisions, you may find yourself embroiled in a court fight, perhaps not unlike the one involved in ending your marriage relationship. Again, speak with your advisors--under those circumstances, it may be better to close your doors and walk away (to start another business by yourself) than to wrangle over a company that isn't yet profitable.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.