Partnerships are a popular business structure when two or more people want to embark on a business endeavor together. Partnerships require few (if any) formalities and have relatively simple taxation rules. What can be difficult, however, is what happens when one partner becomes a problem for the company and you want to remove them.
Look to Your Partnership Agreement
Even though there is no requirement under Texas business laws for partners to have a partnership agreement, it is always wise to do so. This agreement will set guidelines and terms for partners to manage the business, split profits and losses, and other key operational matters. Additionally, this document should provide guidance on how to resolve partner disputes and can even advise regarding requirements for removal of a partner. If you have an agreement on point, you must follow the guidelines in that contract to remove a partner.
When an Agreement Does Not Apply
Without an agreement that specifically addresses this topic, unfortunately, you have few options to remove a partner. A partner is an owner and is not an employee you can simply fire. Instead, you may need to try to resolve any conflicts you have to improve your partnership relationship. This may require dispute resolution methods such as mediation, arbitration, or even litigation. If your conflicts cannot be resolved, you may need to dissolve the entire partnership.
Having a business idea and actually cooperating to run a company are very different matters. If you are having a dispute with a partner, you should not delay in consulting with a highly experienced business attorney as soon as possible.
Find Out How a Houston Business Lawyer Can Assist You
At The Weisblatt Law Firm LLC, we work to find the most favorable and efficient resolutions to business disputes and conflicts possible for Houston business owners. If your dispute does rise to the level of litigation, we will represent your interests and legal rights in court. If you are facing any type of dispute, please contact our office today at 713-666-1981 to discuss how we can help.