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How Do I Force Out My Partner?

I'm a one-third owner of an LLC. One partner is not pulling her weight and we want her to go. If she, the partner, isn't willing to be bought out, what are my options?
Nina Kaufman answered March 4, 2011
URL: http://www.entrepreneur.com/answer/222263
When it comes to kicking out a business partner, you have three options: Follow the procedure set out in your operating agreement, negotiate a different deal altogether, or go to court.


If you have an operating agreement, it doesn't matter whether your partner wants to be bought out or not. If you have the requisite percentage of majority votes, you can make it happen.


The matter can become tricky if your operating agreement lacks a valuation clause. Without it, you could have a dispute about how much her share of the business is worth.


If you don't have an operating agreement, and your partner won't come to terms, your only recourse is to file a lawsuit and ask the court to do what your operating agreement would have done: Kick her out and determine how much she's owed.


However you look at it, isn't an attractive option. Unless your business is worth "squillions," there's a great likelihood that the attorney's fees could make this an expensive proposition for both sides unless you both come to a fair number.

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.