Corporate Law Partner wants to leave S-Corp

[wbkski]

A friend and I formed an LLC and shared 50% of all revenues. We then formed an S-Corp for tax purposes. Now the partner wants to leave and go on his own. Is he entitled to any further proceeds generated by the company he wants to leave?

 

[lwpat]

What does your operating agreeement of the LLC and bylaws of the S corp say? Opps, you didn't get any legal advice and have neither and are now crying in your soup. Unfortunately, you are the norm rather than the exception. Getting into business is easy, but getting out, there's the rub.

Unless you can come to an agreement, he is entitled to his share. Make an appointment with an attorney and do it right. There are too many variables to give you much assistance on a free forum, especially with two entities involved. Probably some type of swap with each of you retaining one of the companies would be my first guess. Tax issues will also come into play so be careful.