Posted by: Jun 17, 2021

business partner trying to force me out

Going into business for yourself can be an incredible, life-defining experience with many benefits. However, it also challenges you to develop all kinds of new skills.

The ability to maintain good business relationships—both inside and outside your company—is certainly one of the most important traits you can develop. However, even the closest business relationships can go south quickly. 

That is one reason why you should always ask yourself, Can my business partner push me out?

You might also be wondering how to force a partner out of business, especially if they are difficult to work with or damaging your business.

Read on to learn about how you can protect yourself if your business partner is trying to force you out. 

Can My Business Partner Push Me Out?

The simple answer is: it depends. Specifically, it depends on factors like the nature of your business relationship, the structure of your business, and the agreements that you and your business partner have in place.

In any case, hiring an attorney can help you protect yourself from your business partner, or at least leave the partnership under favorable conditions.

What Should I Do If My Business Partner Is Trying to Force Me Out?

In most cases, your first step is to check your business’s documentation. These documents will spell out the ways that one business partner can push out another. 

Look at Your Partnership Agreement

A general partnership is one of the most common kinds of business structures in Texas. State law defines it simply as “an association of two or more persons to carry on a business for profit as owners.”

Although the definition itself is simple, general partnerships involve many complex issues. That’s why general partnerships usually operate on the basis of a written partnership agreement.

A partnership agreement defines the relationship between you and your business partners. Topics covered in partnership agreements include:

  • How to distribute profits and losses;
  • How to resolve disputes between partners;
  • How to handle a partner’s departure from the company; and
  • How the business’s assets will be distributed if the business dissolves. 

Partnership agreements often also list specific situations in which one partner can force the other out. Common examples include:

  • Misusing business assets;
  • Engaging in illegal or unethical activity; and 
  • Violating the partnership agreement. 

Other forms of businesses have similar types of agreements. Corporations and limited liability companies (LLCs), for example, often have corporate bylaws or operating agreements. 

If you have a partnership agreement, your partner will only be able to force you out in accordance with the provisions of that agreement. That means that it will be hard for your partner to force you out of the company if you haven’t violated the agreement or any laws. 

What About Buying Out My Partner?

Depending on the relationship between you and your business partner, it may be more advantageous to sell out to them. Alternatively, if you are trying to get your partner out, you can attempt to buy them out. 

A well-written partnership agreement should include a buy/sell provision. These kinds of provisions allow one partner to buy the other out under certain conditions.

The exact rules vary between agreements. Some partnership agreements allow only voluntary buyouts, while others allow one partner to unilaterally buy another out if they meet predefined requirements. 

What If There Isn’t a Partnership Agreement?

Unlike some states, Texas does not require that a partnership agreement be in writing. However, it does define several default events that can trigger the termination, or “winding up” of a partnership, including

  • The expiration of a certain period of time or completion of the undertaking’s purpose;
  • Any event that makes continuing the partnership illegal; and
  • Voluntary decision by both parties. 

If you do not have a partnership agreement, hiring a business law attorney can be a great choice to help you resolve any conflict with your business partner. A qualified business lawyer can work with your business partner to negotiate a favorable separation agreement. I

f negotiations fail, having a business law attorney can help you decide whether you should seek a court order dissolving the partnership.  

Contact a Qualified Business Law Attorney Today

Nobody goes into a business partnership expecting that their partner will push them out later on. However, the difficult truth is that business disputes happen all the time.

If your business partner is trying to push you out of your own company, it’s essential that you understand your legal options and rights. 

In his ten years of practice, Adam Curly has represented business entities and individuals in a broad array of litigation and transactional matters. His clients include both large corporations and small business owners. 

At the Curley Law Firm, we have the experience necessary to resolve almost any issue you might have. If you think your business partner is pushing you out of the business, contact us online or give us a call at 832-225-3448.