Sierra Crest Business Law Group - June 2023

Is It Time to Go Solo? How to Separate From a Parasitic Business Partner

If you’re unlucky, you may find yourself with a business partner who acts as a parasite, draining your company’s resources and causing significant harm. Identifying a parasitic business partner is crucial — without intervention, they might misuse company funds, make unilateral decisions without consulting you, and even attempt to steal important clients. If you think this is happening in your company, follow this guide to protect it and yourself. Seize the Opportunity and Act Today Now is the most favorable time to address this issue. Delaying action will only limit your future business options and can increase the costs associated with resolving the situation. By acting promptly, you’ll not only regain control over your business but position yourself for a smoother transition to a more favorable partnership or sole ownership. Move Slowly and Purposefully Many business owners hesitate to take action due to concerns about immediate conflicts or disputes. However, the process of removing a parasitic partner typically unfolds gradually. In the initial stages, your partner will be unaware of your intentions and plans. This will allow you to proceed strategically without immediate confrontations or disruptions. Start With These Practical Steps When you’re ready to part ways with your parasitic business partner, take practical steps to initiate the process. Here are two crucial actions to consider immediately: 1. Gather your company’s governing documents. Retrieve all relevant documents that outline the structure and agreements of your business.

For corporations, this includes the articles of incorporation, bylaws, and any shareholder agreements. If your business operates as a limited liability company (LLC), gather the articles of organization and the operating agreement. In the absence of formal documents, collect any correspondence or notes reflecting the original agreement with your partner. 2. Access our free resource. Download a copy of our free report, “How to Get Rid of a Parasite Business Partner,” by scanning the QR code on this page. This report provides valuable information on

identifying a parasitic business partner and offers guidance on the next steps to take. By removing your parasitic business partner, you’ll regain control over your company and set the stage for the bright future you dreamed of from day one!

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