Bucks County Business Lawyer Explains Continuing Operations If You Fire Your Partner
As an experienced Bucks County Business Lawyer, I often get questions from business owners, partners or shareholders looking for advice regarding their business. When you partner with someone in a business, you are engaged in a type of professional marriage. If your partner is not holding up their end, you have a couple of options. The first thing is if it’s a company in which they are receiving a salary and you are in control, you can reduce their salary, you can reduce their benefits, you can reduce their perks such as his car payments, life insurance payments, expense accounts, and make their life a little miserable until you get his attention.
As far as business partner termination, yes, it eventually can be done with the understanding that you are documenting their conduct, and why it is you are terminating them. You must follow your appropriate corporate documentation. You need to eventually get to the point as if they are any other employee where you are terminating their compensation. Unfortunately, you are not terminating their interest in the company so they still own shares, they still have rights to distributions if money is to be distributed, but they just doesn’t get a salary because they’re not holding their weight.
If you are not in control of the company, then you have a more difficult problem where you are a minority. In these cases, the criteria we look at is whether they are violating their duty of loyalty to you or if they are taking money that is inappropriate and then you have to resort to litigation almost to get a response as to keeping them under control.
Are you considering firing your business partner and continuing operation of the company? Contact experienced Bucks County Business Lawyer Walter J. Timby to assist you.