50% Owner. 0% Effort. What Are Your Options?

This week’s Ask an Attorney Thursday question hit a little too close to home for a lot of business owners:

“If my business partner stops working but still owns half, what can I do?”

Short answer? You can’t just remove them because they’re not pulling their weight.

Longer answer? It depends on what you put in writing before things went left.

Ownership vs. Effort: They Are Not the Same

One of the biggest misconceptions we see is the belief that ownership automatically requires participation. It doesn’t.

If your partner owns 50% of the business, that ownership interest doesn’t disappear just because they stopped showing up, stopped contributing, or stopped caring.

Unless your Operating Agreement specifically requires active involvement—or outlines consequences for failing to contribute—they may still be entitled to:

• Their ownership share

• Their portion of profits

• A say in major decisions

Even if you’re doing all the work.

So What Can You Do?

Your options depend heavily on your governing documents and the specific facts, but generally:

1. Negotiate a Buyout- This is often the cleanest solution. You pay them for their interest, and you move forward without the dead weight. The challenge? Agreeing on value.

2. Enforce the Agreement (If You Have One)- If your Operating Agreement includes provisions around duties, roles, or “failure to perform,” you may have leverage to force a resolution.

3. Restructure or Limit Their Role- In some cases, you can restructure operations to protect the business, even if ownership remains unchanged.

4. Judicial Dissolution (Last Resort)- If the business is deadlocked or can’t function, you may be able to ask the court to dissolve it. This is expensive, time-consuming, and rarely the preferred option—but it’s sometimes necessary.

The Real Lesson

Most of these situations could be avoided with one thing:

A well-drafted Operating Agreement.

That includes:

• Clear roles and responsibilities

• What happens if someone stops contributing

• Buyout provisions and valuation methods

• Decision-making authority

  
  

Because when things go bad, and they sometimes do, you don’t want to be figuring it out in real time.

• We Talked About This on Our Latest Ask an Attorney Thursday

• We recently broke this down on our Ask an Attorney Thursday series on social media—where we answer real questions about business, contracts, divorce, and civil disputes.

• If you haven’t seen it yet, head over to our page and check it out.

Want Your Question Answered?

We answer new questions every Thursday.

Here’s how to submit:

• Email us at info@davistrialattorneys.com

• Or send us a DM on social media

Deadline: Wednesday by 4:00 PM

(Please note: We can’t review documents or give specific legal advice in this format—but we can point you in the right direction.)

If you’re currently dealing with a business partner issue—or want to avoid one—this is exactly the kind of situation where early legal strategy matters.

Davis Law Group Trial Attorneys

Boutique representation for complex business and civil disputes

📞 404-446-2932🌐 www.davistrialattorneys.com