How to Remove Someone From a Business Partnership

First, consult with the partnership agreement to remove a partner from a business partnership. If the agreement is silent, then consider a buy-out. If a buyout is not possible, dissolve the business partnership.

Remove Partner from Business Partnership Example

Alan has always wanted to be a restaurant owner. After college, he attends both culinary and business school, and he has his sights set on starting a French bistro where he lives in Riverside, California.

Alan finds three other partners and starts a limited liability company called Bistro Pacific, right on the Pacific ocean. For two years, the restaurant has done solid Business as it finds its footing. Finally, however, Alan has a huge problem.

Alan realized early in the process that he was wrong: he does not enjoy working in the restaurant industry. He doesn’t like the long hours and the constant meetings with the chef and employees. He doesn’t even like the food anymore. Alan quickly loses all motivation and interest in the Business, and though he still works hard, he spends most of his time at work dreaming of starting a new business in a new industry: a surf shop. Alan, a passionate surfer, realizes that he needs to adjust his life ambition quickly.

However, during Bistro Pacific’s third year, the Business takes off. Although Alan’s position does not change, and he still wants out, his partners are utterly against dissolving the Business. They have worked hard and are now finally seeing the fruits of their success; why would they stop now?

Alan’s desire to take his name off the Business is strong, yet he does not want to offend the partners he has worked alongside for years. Although Alan knows he wants to end his association with Bistro Pacific, he is unsure how to begin the process.

Alan contacts an experienced business attorney, and his lawyer helps him review the restaurant’s operating agreement. Since the operating agreement contains provisions for how an LLC member can withdraw, Alan has a clear path to take. His lawyer helps Alan remove his name from the restaurant’s liquor license and all other debts, liabilities, and licenses. Alan opened a surf shop in Huntington Beach, CA, a year later.

Alan’s situation is one that many entrepreneurs and business partners encounter during their careers. Although many entrepreneurs know how to form companies, they do not focus on removing their names from LLCs or removing themselves from partnerships.

The structure and type of the Business dictate how partners can remove themselves from a company. For example, sometimes the process involves changing the business’s name, and other times the partners must dissolve the company.

This article will cover how business owners can remove themselves from limited liability companies and partnerships, the risks, and the most important aspects to remember about the process.

How Can Business Owners Remove Their Name from a Limited Liability Company?

When an individual seeks to remove their name and overall presence from a limited liability company (LLC), the first step begins with the initial operating agreement that the partners signed.

Many operating agreements include different provisions regarding removing a partner. For example, some operating agreements require all members to unanimously agree that a partner can leave. Other LLCs are more lenient in their rules and allow partners to leave for any reason.

Reviewing the operating agreement for the terms of member withdrawal is a fairly simple solution, but what about companies whose operating agreements do not cover withdrawal?

If the LLC’s operating agreement does not provide instructions or provisions regarding withdrawal, the state decides how partners remove themselves. All states have default LLC rules, and most state policies touch on withdrawal. Sometimes, the partner or the company must create an official filing with the state.

How Can Business Partners Remove Their Names from Partnerships?

Removing one’s name from a partnership differs from removing one’s name from an LLC. There are three options that partners usually pursue depending on their specific situations.

Run the Business as a “Doing Business As” Sometimes, business owners think changing the business’s name will turn off customers, damage name recognition, and hurt sales. Other times, business owners cannot find an alternative name they think fits the Business.

When changing the company’s name is not an option, the existing company can continue to run under a “Doing Business As” or DBA name. To complete this process, file with the local county clerk to register the name change and ensure the name is used legally in the county. Please note that a filing fee will range by state from $10 to $100.

Completely Dissolve the Business

How the partners dissolve the Business depends on the nature of the operating agreement. For example, this is the only option if the agreement contains no additional provisions regarding name removal. Together, the partners must dissolve or end the Business. Then, they can re-register the company without the departing partner’s name.

While this is an effective solution, it is also time-consuming and can be both expensive and frustrating. Therefore, it is best to explore other options before trying to dissolve the Business.

Change the Name of the Business

Changing the company’s name is an option only if the operating agreement says that the Business can continue after one partner departs.

If the operating agreement contains this provision, the partners can change the business name to reflect the departure of one partner. Selecting a name is sometimes as easy as removing one partner’s name from the title. However, before doing so, the remaining partners should ensure that the new name is not already in use elsewhere.

For example, Carl, Mark, and Simon Wilson are brothers who run CMSW Consulting. When Simon leaves the company, the brothers consult the operating agreement they signed. The agreement states that the partners can change the business name once a partner leaves. Once the brothers consult with their attorneys and make sure that Simon leaves the Business on the correct legal terms, they change the company’s name to CMW Consulting, wish their brother well in his new ventures, and continue.

How Can a Partner Remove Their Name from a DBA Partnership?

When a member of a Doing Business As a partnership or DBA partnership wants to take their name out of the equation, they should turn to their partnership agreement. Typically, the partnership agreement includes provisions regarding name changes.

However, some partnership agreements neglect to mention name removal. If this is the case, the departing partner should consider state requirements for removing DBA status.

Some states do not contain requirements for this process, but some feature specific requirements. Overall, there are a few more general steps to take when separating one’s name from the name of a DBA partnership. These include:

Written Notice of Partnership Withdrawal

Let business partners and vendors know that the departing partner is no longer a part of the Business. This important communication tells others that the partner removing their name is no longer authorized to engage in Business on behalf of the company. This information also lets vendors and partners know that the departing partner is no longer responsible for the company’s actions, purchases, sales, or other business interactions. Most importantly, this notice must be given in writing and cannot be verbal.

This way, if the remaining partner becomes angry or emotional about the departing partner’s absence, they cannot buy things in the partner’s name or make them legally liable for expenses.

The written notice of withdrawal disallows partners from behaving poorly and creating problems for the Business, including lawsuits and emotional issues.

Restrict Access to All Business Bank Accounts

Another important step when removing someone from the partnership is to remove their name from the business accounts. These include bank accounts, credit accounts, and any other accounts the partner had access to.

Notify the Internal Revenue Service

When a business partner decides to remove themselves from a DBA partnership, it is essential to notify the Internal Revenue Service (IRS) of this change. Next, ensure that the partner’s Employer Identification Number (also known as a Federal Tax Identification Number) is retired.

Retire the DBA Name

When a partner leaves a DBA partnership, they must also be sure to have the DBA name retired or “unregistered” in their state. Usually, the secretary of state or the county clerk can help with this.

How Can Nakase Wade Help Remove A Partner from a Partnership?

Sometimes, partners can dissolve companies easily without the need to hire a lawyer for contracts. In other situations, one partner can remove another without hassle or concern. However, removing a business partner can also be a difficult process that causes emotional stress and even financial losses.

When one partner wants to remove their name from a business they are involved in; sometimes their partners react poorly. However, when an LLC or partnership member wants to move on for some reason, it is best to get the process over quickly so the company can continue to thrive. It is also vital for the partner and the Business to consult their operating agreement and fulfill the process on correct legal terms.

At Nakase Wade, our business lawyers and corporate attorneys have successfully helped many professionals remove their names from their companies. We know the process can be difficult and time-consuming, but we strive to make it as quick and easy as possible. In addition, our lawyers focus on your needs and priorities, so whatever the reason for the change is, we have you covered.

In our initial free consultation, our lawyers will examine the company’s documents and note all relevant details. Then, we will provide the departing individual and their company with options.

We do not tell our clients what to do—we listen and provide choices. We can, however, help you choose the choice that is best for you and best for the life of the Business. Every client is different, and every relationship among partners is also unique. We know that sometimes, business partners must part ways. Other times, LLC members must move on to new opportunities. For each unique situation, we aim to provide fitting solutions. Our lawyers will secure the outcome you are hoping for, so you can get back to work.

Contact Nakase Wade today, and let’s tackle the problems with your present partnership, so you can keep your eyes on your business future.

Best Free Payroll Software for Small Businesses and Startups in 2025

Find the best free payroll software options for small businesses and startups in 2025 with essential tools and flexible features. Compare user-friendly platforms offering global payments, tax calculations, employee portals, and cloud access at no cost.

What Services Does a California Business Lawyer Provide?

A California business lawyer helps protect your company by providing legal guidance on structure, taxation, contracts, and compliance. Their services ensure you avoid costly mistakes and navigate disputes, allowing you to focus on growth.

Where Can I Find a Business Lawyer?

Find a skilled business lawyer to navigate legal matters like contracts, trademarks, and liability issues. Protect your company with expert legal advice and support.

What Are the Requirements for a Business Contract Termination Letter?

A contract termination letter must clearly state the reason for termination, reference the original contract, and follow required notice procedures. Ensuring proper documentation and adherence to contract terms helps prevent legal disputes and wrongful termination claims.

Are Verbal Contracts Binding in California?

A verbal contract can be legally binding in California, but proving its terms in court is often difficult. Written agreements provide stronger legal protection, reducing risks of disputes and misunderstandings.

Where Can I Find a Business Lawyer Near Me?

Find a business lawyer by seeking referrals, researching credentials, and ensuring they specialize in your industry’s legal needs. Schedule consultations to assess their expertise, compatibility, and pricing structure before making a final decision.

What Is the Statement of Information and When Is It Required?

A Statement of Information is a required filing for California corporations and LLCs, providing key business and leadership details. Filing deadlines vary, requiring annual or biennial submissions to maintain compliance and avoid penalties.

What Is Indemnity and How Does It Apply to Insurance Contracts?

Indemnity protects individuals and businesses from financial loss by ensuring compensation for damages under legal agreements, including insurance contracts. Various indemnity policies cover liability, property damage, and professional risks, with terms defining coverage limits and exclusions.

What Is Gross Profit and How Is It Calculated in Financial Statements?

Gross profit represents the revenue remaining after deducting the cost of goods sold, helping businesses assess production efficiency and pricing strategies. Calculating gross profit involves subtracting direct expenses from revenue, providing insights into cost control and financial performance.

What Is Gross Income and How Does It Differ From Net Income?

Gross income includes all earnings before deductions, while net income is what remains after taxes and expenses. Understanding these figures helps determine tax obligations, loan eligibility, and overall financial health.

What Is Beneficial Ownership Information and Why Is It Important for Compliance

Beneficial ownership information helps prevent financial crimes by increasing transparency in corporate structures. Businesses should stay informed on reporting requirements to avoid penalties and ensure compliance with evolving regulations.

What Is Arbitration and How Does It Resolve Disputes?

Arbitration resolves disputes by allowing a neutral third party to make binding decisions, offering privacy and efficiency over traditional litigation. Businesses and individuals prefer arbitration for its speed, cost savings, and adaptability, ensuring enforceable outcomes across various legal frameworks.

What Is a Corporation, and How Does It Differ From an LLC?

A corporation is a separate legal entity owned by shareholders, while an LLC offers flexible management and pass-through taxation. Corporations require stricter compliance and structured oversight, whereas LLCs provide fewer formalities and adaptable ownership structures.

How Do You Incorporate a Business, and What Are the Benefits?

Incorporating a business creates a separate legal entity, protecting personal assets and offering potential tax advantages. This process enhances credibility, simplifies ownership transfer, and provides growth opportunities while requiring compliance with specific regulations.

How Do You Get an LLC, and What Are the Benefits of Forming One?

An LLC provides liability protection, tax flexibility, and management freedom for business owners. Follow seven simple steps to establish one efficiently.

How Do You Start a Business, and What Are the Legal Requirements?

Starting a business in California requires careful planning, legal compliance, and financial preparation. From selecting a business structure to obtaining permits, tax registration, and funding, each step is crucial for long-term success.

How Do Accrual Accounting and Cash Accounting Differ in Financial Management?

Accrual accounting records transactions when they are earned, while cash accounting records them when money changes hands. Choosing the right method impacts taxes, financial planning, and cash flow management for businesses.

Do I Need a Permit to Operate a Vending Machine?

A vending machine business requires permits, including a business license, EIN, and compliance with state and federal regulations. Proper location approval, ADA compliance, and product labeling are essential for legal operation and profitability.

Are There Grants Available to Start a Business?

Government and private grants provide funding to help entrepreneurs start businesses, with eligibility varying by industry, location, and business type. Opportunities include federal programs, state initiatives, and private grants supporting startups, research, and minority-owned businesses.

What Is a Stock Corporation in California – General Requirements?

A stock corporation in California raises capital by selling shares, granting investors ownership and voting rights while maintaining limited liability. These corporations, classified as C or S, follow specific legal steps, including filing Articles of Incorporation and drafting corporate bylaws.

Is a Contract Valid Only if It Is in Written Form?

A contract can be legally binding whether written or verbal, but some agreements, such as real estate deals, require written documentation. A valid contract must include clear terms, mutual agreement, legal capacity, consideration, and intent to create enforceable obligations.

What Is a Cash Receipt and Why It Matters for Business Transactions

A cash receipt records the exchange of cash during a transaction, detailing the amount, parties involved, and purchase specifics. Maintaining accurate cash receipts supports tax reporting, financial management, and dispute resolution while ensuring compliance with audits.