The Law Firm of Lan Quoc Nguyen & Associates
The Law Firm of Lan Quoc Nguyen & Associates

800-505-1238
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800-505-1238
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Can partners sell their shares without your consent?

On Behalf of | Mar 2, 2021 | Business Transactions And Litigation |

California law allows an individual to sell his or her interest in a partnership without your consent. However, it may be possible to override state law by creating a custom partnership agreement. Let’s take a look at what might happen if your partner decides that he or she doesn’t want to work with you anymore.

No one is forced to stay in a partnership

A partnership is similar to a marriage in that neither party can be forced to remain in the relationship against their will. Therefore, if your business partner isn’t interested in working with you, he or she is free to withdraw from an existing deal at any time. Assuming that a valid partnership contract is in effect, you will likely get the right to acquire that person’s stake in the business. The contract might also limit the types of outside entities that are allowed to acquire your former partner’s share of the company.

A new owner may have limited rights

Let’s say that your partner obtains your consent to sell his or her portion of the company to a family member who you have never met. In most cases, this person will not automatically become a true partner in the business. Instead, this individual is simply granted the right to share in the profits or losses that the company generates. A business law attorney may provide more insight into the legal differences between a shareholder and a partner.

You don’t want a partner who doesn’t share your vision

Generally speaking, you don’t want to work with someone who isn’t excited about the product or service that the company provides. Therefore, it’s generally in your best interest to let a disgruntled partner leave even if it’s not the outcome that you prefer.

If you are involved in a dispute with a business partner, it may be in your best interest to speak with an attorney. He or she may be able to review the matter and help you resolve it in a timely, amicable and affordable manner.