If you are in a partnership business and some of your partners or Co-founders are threatening to leave the business or they have actually left with some units of the shares of the company standing to their credit, Here is what you can do about the shares already taken up by them.

1. Negotiate with the partner leaving.

Depending on the number of shares owned by the partner wanting to exit you may have to actually negotiate with the partner to return some shares to the company so that he can easily be settled or paid off the remaining shares.

If he refuses to negotiate, then you should consider option 2.

2. Dilute their shares.

You can do this by issuing additional shares but please include a vesting shares schedule.

If the partner(s) refuses to negotiate with the company you can reduce their stake in the company by increasing the number of available shares.

For example, if your company was registered with 1 Million share capital and Mr. A who wants to leave or has left has 30% of the shares I.e. 300,000 units of shares by increasing the share capital to 10 million it automatically dilutes his shares to 3% of 10 million which is a mere N300,000 out of the 10 million.

Now the company has an additional 9 million and can easily raise funds from new investors or partners.

The 3% controlled by the leaving co-founder is quite insignificant and can easily be settled by the company.

Where negotiation with the partner fails, this is the next best option.

3. Wind up the Company

This is a less desirable option but may be the best depending on the particular circumstances of the case.

By winding up the company, you are actually closing the business officially and there won't be a need to drag over shares again as the company no longer exist.

If negotiation fails and you are unable to increase the share capital you can just let the company die a legal death through winding up proceedings so that everybody can go home and rest.

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