What are the consequences if a co-founder resigns but refuses to sign a legal release?

We regularly help startups deal with these (annoying) types of issues here at LawTrades. Without more facts it’s really hard to speculate on the consequences. As Dana cautioned, you should definitely contact a seasoned startup attorney given the gravity of the situation. I agree with Gil Silberman in that the former co-founder may just be adamant against signing any agreements on his/her way out. A company will typically provide some form of consideration in exchange for a former employee’s legal release. As such, you could try offering money/equity for his/her release. It obviously becomes more difficult if the former co-founder owns a significant portion of the company. If that’s the case, it’s even more imperative for you to contact an attorney to understand your options moving forward.

If you want a quick, painless way to seek affordable legal advice then check out our platform. We offer free consultations and fixed, flat-fee pricing to fit the needs of bootstrapping startups. Good luck – I hope everything works out for your company!

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