If you have no operating agreement, he isn’t providing capital, and his name isn’t on the business, I fail to see what the problem is. “Hey, I’m going to move on without you. You’re not able to provide what you promised and we need to scale. I hope we can stay friends, but if not I understand.”

Repost this with periods and we will help you.

Maybe start by understanding what it is exactly HE said.

Friends have expectations that extend beyond business.

So you tell us what is the right path to take.

Please use punctuation and paragraphs. I’d respond but your post is sloppy.

Buy out his share and put in the sale contract that you retain company name and EIN, LLC, etc.
That’s the only way since his name is on the stuff, otherwise you risk liability. Then of course update the SCC and IRS with the sale info so it gets updated on their end.

Create new llc with near identical name with only you, get ein and operate under that

You can always use the threat of starting a new LLC to try to negotiate a fair compromise. Whatever you do, you need to be honest about why you need to part ways. It may be tempting to make up some other reason to spare his feelings, but rip the bandaid off. “I don’t feel like you are holding up your end of the bargain, and I’m not willing to keep doing all the work for only 50% of the profits.” Point out specific instances where he has not done what he said he would do. He may argue at first, but when you lay out the details, he may come to realize that he is falling short. Usually, people who are failing know they are failing. If you can get him to admit that he isn’t really cut out for this, then he might take a reasonable offer to walk away. If not, then you can use the nuclear option of threatening to file a new LLC and abandon the current one. If he isn’t willing to work in this business, he’s not likely to work or spend money on an attorney to try to save his ownership. On that note, this might be a good time to consult a good corporate attorney before you get into pissing match.

And then never do business with anyone again without a clear Operating Agreement with a good transfer of ownership section, including a buy/sell clause. If you had that, this could be solved in 10 minutes. You offer him a price for his shares, and he can accept the offer, or he can buy you out at the same price. Given that you said he’s not interested in working and had no money, he’d take the buyout. Don’t beat yourself up for this mistake, though. Many business owners make serious mistakes in their company setup, especially with friends and family. I’m currently amending my main LLC Operating Agreement because it doesn’t have any of the stuff I just talked about.

You receiving some very bad legal advice that could make your situation worse.

Don’t start a company with the same name. That’s a breach of your fiduciary duty.

Don’t just lock him out. That’s probably not legal.

You didn’t indicate how much money you’ve put into this, or how much the business has earned, or even which state you’re in.

Find a business attorney in your state. You may have to pay for the hour, but without the size and location of the business, there’s only so much that can be offered.

You appear to be asking legal questions on Reddit. that is another rookie mistake. go get a business lawyer and get a decision based on your state law the appropriate solution may well vary from state to state.

If you believe in the business, and feel you cannot just restart under a new LLC, just swallow your pride, buy him out and look forward. FWIW, I too had a 50/50 partner that didnt work out well.

I’d offer to buy his half for more than what it is worth. The attractive sum of $100.

No one else on the planet would pay that much.

If he says no, I’d sell him my half for $1 and open a new LLC.

People think that owning a business means they own an asset. Thats only true if the owner could stop working there tomorrow and the business keeps making money.

The finances sound like a mess. Operating and planned capital expenses need to be held back for the business to scale. You shouldn’t be paying out salaries or bonuses or whatever without a budget and plan. The partners should not have to “pay back in” for the business to buy more product or scale up operations. You’re paying extra taxes on this money if nothing else and causing extra work and broken promises.

At this point, you have a good handle on your options.

I went through a break-up of an equal 3-Partner LLC, however we all had put in same money/work and it was still a shit show.

At this point, you need a strategy to proceed. My approach would be, time to play a little hardball and some poker at the same time, meaning you have to be tough, may have to bluff and definitely need to embellish along the way.

Sit down face to face and state the following:

1. We must end this partnership now.

2. I’ve hired an attorney.

3. Between startup money, rent and supplies and equipment totaling ~$12k, Florida’s laws heavily support me.

4. My options are to 1.) Sue you to remove you from the corporation or 2.) Fold the company in which I retain the assets to offset my $12k.

5. How would you like to proceed?

Don’t get into any discussion over the 5 points you state. He will want to because he will be in disagreement. Bite your tongue, bite your lip, bite anything to not say a word other than the next question.

There’s a 3rd option on #4 which is for you to buy him out. Don’t offer that option, let him bring it up. If he does, keep your response short and direct (have an amount in mind) "I may consider that if it’s mutually fair. How much? "

Don’t offer the first amount! You don’t want to compete against yourself.

If his offer is stupidly high, just tell him; No thanks, we’re too far apart to even negotiate. I’ll get back to you after I speak to my attorney about my best alternate options.

If his number is high, let’s say $20k but something you think you could negotiate with, say: “I feel like we’re very far apart. I’m at $5k.”

Obviously, if you come to an agreement it you must create a legal document. You should have appropriate legal verbiage that the agreed upon amount between both parties is final and neither party shall have any additional claims against the other whatsoever. You both date and sign.

If you decide to buy him out, I recommend monthly payments 12 or 24 months depending on the amount for the benefit of preserving your cash flow. As much as you want him out of your life, don’t hurt your cash-flow.

If you decide to form a new business entity and start to shift assets to the new entity, once the current website is abandoned, you can claim it. You can also modify your business registration and claim the current company name and use it as a DBA.

Feel free to DM me with any questions.

Good luck.

50/50 means nobody is the boss. Nobody calls the shots. Nobody is in charge 49/51means someone is the boss, someone calls the shots and someone is in charge.

You need a operator agreement in place - this outlines who is responsible for what, where and how - definitive outlines for workload - without a operator agreement, it’s your word vs. his word.

Secondly - partnerships almost never workout because nobody’s work ethic’s lines up with others and often times partnerships end with one wanting out and one heavily invested.

Source: I am learning from the advice I just gave you from personal experience. Currently ending a partnership in a business for many reasons… and the lesson I’ve learned is I’ll never have another partner. Only employees, operator managers who I pay and retain full control over decisions. Nobody else will run my business by any standard that isn’t the one I set

You’re only 6 months in. Just bail and do your own thing