Q: My informal business partner is not pulling his weight and I'd like to take the product and move on without him.
I wanted to start a company with an associate of mine a few years ago. We agreed on how we would structure the company and what our roles would be. I would develop the product and he would handle business and sales operations.
Without the company being formalized, I created the product with his (or his associates) occassional guidance. However he became very unresponsive, usually taking weeks or months to get back to me.
Over time (3 years), the product has sat dormant and I continue to express my concerns, but he still has not moved the product forward in any meaningful way and simply delivers empty promises. He has also not created the company or our shareholders agreement as he said he would.
I would like to move forward with the product without him.
Should I tell him or just move on? Should I have concerns about him trying to claim a part of the business later? What can I do today to minimize risk?
A: You may have formed a general partnership. A partnership is a business form created automatically when two or more persons engage in a business enterprise for profit. I would have him signed documents stating that no partnership was formed and disclaiming any rights to the product.
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