Forums: Discussions for entrepreneurs and small business.

My business partner and I own a brewery registered as an LLC. He has decided to leave the business for personal reasons. We are just in the planning stage and have not raised any money. We have about $800 in debt on my personal credit card. There is no partnership agreement.

He is not demanding anything and is willing to just walk away, but I still want to protect against him demanding a share of ownership in the future if the brewery is successful.  I also want to protect against him using the names of the beers in a competing brewery. The names have not yet been trademarked.

Any advice?

Have an attorney draw up an agreement that addresses your concerns.  Also put a no competition clause in the agreement.  This is your best protection.


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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

Finding a good business partner (outside partner, such as an alliance) requires an amount of due diligence. This simply means you will need to look at all aspects of the other person’s business and sometimes a bit of their personal life. You will need to find a common thread with the potential partner and then spend time developing the relationship before embarking on any kind of partnership that will tie you financially. I have heard so often that partnerships do not work. When I dig into the reason, each of the parties liked each other and decided to create the relationship on an emotional level. A partnership will very rarely fall apart so readily if you have done your homework. You should know about the financial background of the individual in business and at home. Credit ratings will often tell a great deal about an individual.

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Hi JPStuffings,

If your business is organized as an LLC, you should also have an operating agreement that addresses member ownership, how a member forfeits their interest, or can transfer to another person.

A non-compete would likely be tough, because your partner has no incentive to sign it, except as a good faith gesture. Those are more customary at the time of inception, or when you bring a new member onto the organization.

Perhaps you can discuss that in the context of absolving him/her of their share of debt, if in fact they're also on the hook for it.