Startup Law: What are the steps to be taken if I want to leave a business in which I have at least part ownership?

As a practical matter, the very first thing you need to do is to gather every document you have signed regarding your partnership. Also gather all the corporate documents of the business–articles of incorporation, by laws, operating agreement, stock agreement, etc. Once you have gathered all of this documentation, you need to take it to a lawyer so he can review it. How you proceed from there will depend on what you agreed upon when you entered the partnership. A lawyer will be able to explain to you what is contractually required of you to leave your partnership and any state laws that might need to be considered. A lawyer would also be able to advise you the consequences of breaching any terms of your partnership agreement and any other agreements you made. This is crucial information to have to make a fully informed decision.

Ideally, you will want to negotiate your exit from the partnership amicably. This may or may not be possible. Whatever happens, you want the terms of your exit from your partnership in writing–i.e., a separation agreement (they’re not just for divorces!). Again, a attorney should help negotiate the terms of your agreement and either draft the separation agreement (or review and revise it if drafted by another). At the end of the day, your separation agreement should, at the very least, (1) set forth the disposition of all assets and liabilities, (2) set forth the purchase price of your ownership stake, and (3) set forth how payout will be made.

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