How To Remove A Problematic Business Partner (Legally)

Posted April 21, 2025 in Uncategorized

Are things going sour with your business partner? Maybe you’re not seeing eye-to-eye with your company co-founder, or maybe one partner among several in your LLC isn’t pulling their weight. Can you kick them out? Maybe. Depending on your partnership agreement, you may be able to enact a buy-sell clause or even have grounds to dissolve the partnership agreement. But what happens when the problematic partner in question is skirting the line? Maybe they’re causing trouble to force you to buy out their share at a premium, or maybe they’re considering going their own way but want to hang on to certain pieces of intellectual property or retain plum clients.

Our Littleton, CO, business dispute lawyer can help you legally remove a troublesome partner and preserve your business operations and professional reputation. Here are some of our little legal secrets to doing so.

Savvy Strategies For Removing a Troublesome Business Partner

Before you initiate any legal action, bring your governing documents to our Littleton business dispute lawyer. We’ll review your operating agreement (if you have an LLC) or your partnership agreement (if you have a limited or general partnership). This document should outline:

• How ownership interests are handled
• Whether partners can be removed
• Procedures for voluntary or involuntary withdrawal
• Buyout terms and valuation methods

If there’s a removal clause and your partner’s actions meet the threshold for removal, then follow each step to the letter. However, there may not be a removal clause, and if not, jettisoning the troublemaker takes a little more effort.

Start the Paper Trail

Document each instance of problematic behavior. Your other partners (and the Colorado courts) will require evidence of misconduct or failure to perform.

If you have proof of financial mismanagement or theft, removing the partner may be easier, as these offenses may carry criminal penalties, too. Note any instances of failure to fulfill their fiduciary responsibilities.

Keep emails, financial records, meeting notes, witness statements, and even text messages that indicate your partner’s:

• Consistent failure to fulfill responsibilities
• Conflicts of interest or competition with the business
• Misconduct damaging the company’s reputation

If the dispute moves to litigation, your legal team needs all the documentation you can supply.

Attempt to Resolve the Issue Privately

You may not need to take legal action. If your relationship with the troublesome partner is still fairly cordial, start with a direct conversation or a mediated meeting among all partners. State your concerns and the specifics of the issues the partner is causing, and offer a negotiated exit. Even if you have to buy out their share at a premium, it could still end up costing less than a legally contested, lengthy, forced removal.

Explore Legal Removal

If the carrot doesn’t work, then you may need the legal stick to remove the partner. Your partnership agreement may have a legal removal process, which our Littleton business dispute lawyer can initiate on your behalf.

This may necessitate:

• A vote of the remaining partners (if allowed)
• Following any specific removal procedures in your agreement
• Executing a buyout, often with a pre-determined valuation method

Absent a removal clause, you’ll likely have to file a lawsuit seeking judicial dissolution or petition the court to force a buyout based on deadlock or breach.

Do you need help removing a troublesome partner from your business? For over twenty years, the corporate litigators at Volpe Law LLC have helped business owners like you handle the delicate task of removing a partner while preserving their profitability. Contact us today to review your options.