In today’s Freedom Friday blog and email newsletter, I want to answer a question that I was recently asked, although in a different way, and that’s how to remove your business partner, or in the case of an LLC, how to remove your fellow LLC member, and I am not talking about a voluntarily removal, or one that is amicable, but I am talking about how to force out your business partner or LLC member, especially when that business partner or LLC member is causing problems for your business. In today’s Freedom Friday blog, I’m answering the question how to remove and force out your business partner in 2025.
First of all, if you believe that your business partner or fellow LLC member is causing an issue or creating a dispute within your business, if you are able to do so, you need to collect documents and get organized. Of course, if you’re not able to do so, for whatever reason, then you need to consider hiring an attorney to help you with this process. Every business owner should maintain an organized file of all the business agreements, contracts, accounting records, etc. You should have copies of your LLC Operating Agreement, partnership agreement, corporate bylaws, or other governing documents, if they exist, for when you meet with an attorney. If you need to remove or force out your business partner or LLC member, these documents will guide you on how to do so and provide a starting point in the process.
The next step in removing or forcing out your business partner or LLC member is to create an outline and identify your goals. Sometimes if you want to force out and/or remove a business partner or LLC member, you might need to dissolve the LLC or partnership as a whole. Your outline should explain the details, organize important dates and events, and summarize what happened to cause the dispute. All of this information will assist your attorney in this process.
Before you resort to filing a lawsuit against your business partner or LLC member (sometimes this is required for expulsion, especially if it cannot be done through following the procedure outlined in your operating agreement or partnership agreement), your operating agreement or partnership agreement may require mediation or arbitration, or both. You need to consult a lawyer to review your operating agreement or partnership agreement to help you follow this process. If the business partner or LLC member is not cooperative with this process, you may need to file a lawsuit first, and then the other business partner or LLC member may ask the court to send the case to mediation and/or arbitration. If the parties cannot reach an appropriate settlement, then litigation may be the best option. Also, if there are serious concerns about your business partner’s or LLC member’s potentially illegal or unethical behavior which jeopardizes the business itself, you may need to consider hiring a receiver (or asking the court to appoint a receiver), to operate the business until the lawsuit is resolved.
If you file a lawsuit against your business partner or fellow LLC member, it will be an extremely involved and time-consuming process. After the initial pleadings are filed with the court, there is discovery and review of the evidence, and then depositions. All of this can erode your sense of privacy, take up a lot of your time, and emotionally drain you. You will likely need to testify in court if the matter goes to trial, or even if you need to seek a preliminary injunction. This is why its important to consult with an experienced business attorney who can help you identify your goals, protect your interests, and navigate the process with you until it reaches a final resolution.
Thinking about starting a small business? Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth? Please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.