Starting a Business

[saden1]

Originally Posted by JoeRedskin

In writing with clear and unequivocal statements. If there is anything amicable left in the relationship, enter into an agreement that terminates the relationship and in which he rescinds all rights to any interest in the company including any rights in earnings derived from his past contributions.

If he has been paid or put money into the business, make sure that it is accounted for and he agrees that it has been accounted for.

If he has received all the compensation he is going to receive, spell that out and make clear he is owed nothing else. If he is going to receive compensation to waive all interest in the company's future earnings, spell out the compensation and the waiver.

If it is not amicable, do all the same things send it to him asking for him to set forth his disputes, if any, in a set time frame. Send it registered/certified, etc. Serve it on him by private process server if you have to. Once the deadline passes, if he has not responded, send a letter indicating the partnership is over in accordance with the terms of the prior letter.

Mercilessly put things in writing, no detail is too small and be clear that he has waived, either by agreement or by his failure to timely dispute after notice, any future interest in the business and has similarly waived any money owed him for his past contributions.

If he is willing to agree, it is easy. If not, paper, paper and more paper. Remember, you want him out of the past and future of the business. You want to owe him nothing for the past and extinguish any claims he would try to bring in the future.

Did you have a partnership agreement to begin with- either oral or written - concerning investments in and proceeds of the business?

He hasn't put a single cent into the business while I have put in nearly 2K thus far not to mention enormous amount of time and energy. No one has been paid for any services rendered and won't be paid for some time. You get paid in equity and he hasn't lived up to his end.

We have had oral conversation about going into partnership and his contribution so far has all been oral in nature (mentoring if you will). We don't have any legal partnership and the couple times I have brought the subject up for discussion he said we aren't there yet and need to spend our money wisely (lean startup model, etc). Now, we are ready to take the next step and it make sense to get all our legal ducks in a row but he has been a no show several times for our meetings and frankly I am tired of his lack of effort and commitment.

I am meeting with a tech startup law firm this Friday to create a formal business partnership with my other partners and represent our company in all future legal matters. I intend to bring up the issues with this particular partner and hopefully they will do all the work in legally serving ties with him.