Take Him Out!

Jun 27, 2022 12:49 pm

Dear , what do you do when a particular Co-founder is underperforming...


not meeting up to expectations or having unmanageable and unbearable character defects?


Well, just take him out from your startup.


And do it quickly and early too.



The earlier he is removed, the better for you and the business.


in fact, I recommend he is removed before you start to gain traction.


But wait...


You must follow due process in removing him, otherwise, be prepared for a serious lawsuit in the future.


Now, Co-founders' fall-out is a common phenomenon in a startup.


There are more broken Co-founder relationships than there are successful ones.


The question now should be...


How do you legally remove a Co-founder in a startup when the relationship has gone South without the risk of getting sued?



First of all, understand that an aggrieved Co-founder will only want to sue if he objects to his removal or the manner in which he was removed.



Now there is a common mistake I see a lot of founders make when they want to remove an unwanted Co-founder...


especially when he is doubling as both director and a shareholder.



Instead of following the right process which I am going to share, they simply ask their lawyer or registration agent to remove and replace the Co-founder immediately without his consent.



They file post-incorporation changes and remove the allotted shares to the Co-founder.


This is a very bad way to remove an unwanted Co-founder, and it is setting you up for an otherwise avoidable future litigation.


Instead of doing something as lame as this, you could just sit down with us and get a clear and appropriate strategy that will save you court time in the future.


The wise book says that wisdom is profitable to direct.


This is true.


Be Wise


To your #legalsense.

-Barinaada.




Comments