If a business partner no longer shares a common interest with the other partners or is a liability to the business, it is possible to remove them from the partnership. However, removing a partner may not be as easy, especially if their departure is involuntary.
There are several ways of removing a partner from a partnership. The easiest way is by negotiating a voluntary departure. If you can agree with the partner in question and reach a settlement, all they have to do is formally resign from their role. If that is not practical because the partner is unwilling to leave, it may be time to explore other options.
What does the partnership agreement say?
The partnership agreement is essentially the constitution of the business, and it should guide you. It explains the importance of having a solid and binding document that addresses such eventualities.
You can remove a partner by implementing the terms of the agreement that every partner signed when forming the partnership. Depending on the specific clauses, it may require a majority vote or a unanimous decision by all partners.
Without a partnership agreement or if its clauses do not address this, your other options include dissolving the partnership or going to court. It is a decision you need to make wisely, given that it could affect the future of the business.
Protecting your business interests
You do not want to get caught up in a court case because you removed a partner from the business without following due process. You could face certain legal and financial sanctions if the case is ruled against you.
Therefore, it is best to seek guidance on how to go about removing a partner in a way that will protect your business interests.