Can I fire my co-founder? He isn’t pulling his workload. I have to do most of the work. I have 60% equity, he has 40%. We don’t have intellectual property, just a domain. He’s part investor, part cofounder, and is paying most of the operation fees.

As you can see from the rest of the answers here, the answer to your question is a bit complicated and depends on a few factors. A simple answer before getting into too many details: probably, but it will have consequences.

The biggest factor is the formation of your company — corporation, LLC, or partnership. In a corporation or LLC, management and ownership are separate, so it will be easier for you, acting as manager, to fire your co-founder as an employee. Of course, the specific strategy and actions that will be needed will depend on the provisions in your bylaws and articles of incorporation. Remember though that this will not take away the co-founder’s equity in the company so he or she would still own 40% of the company as an owner without being an employee as a manager.

If your business is a partnership, things get a little more complicated. Partners have equal rights to continue to run the business together so if you seek to fire a co-partner you will essentially have to dissolve the business and give the co-partner his or her share of assets (here, it would be 40%).

Again, there are many factors to be weighed when thinking about firing your co-founder. For that reason, I would suggest that you speak with an attorney about your options before making a decision. At LawTrades, our business attorneys have helped many others through these situations. Give us a visit for a free consultation!

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