What to Do if Your Co-Owner Refuses to Sell or Buy Out Your Share
- September 6, 2025
- Business Litigation
As the co-owner of a business, you have agreed to share its profits and losses with another party and make joint decisions about how it will be run. What happens, though, in the event that you or your fellow co-owner no longer wishes to run the business together? No matter who it is that decides to step back, they still have a financial investment, and that is not something that can easily be walked away from. One possible solution to the problem is for the remaining co-owner to buy the share belonging to their departing colleague, but unfortunately, that isn’t always a viable solution. At Lusk Law, LLC, we can help you determine what to do if your co-owner refuses to sell or buy out your share.
Why a Co-Owner Might Refuse to Buy or Sell the Other Co-Owner’s Share
In a perfect world, when one co-owner wants to walk away from a business, the other co-owner would buy the share of the first party, resolving any dilemma. Unfortunately, that isn’t usually the case in real life. There are many reasons you might refuse to buy or sell the other co-owner’s share (or vice versa), such as:
Bad Blood
The simplest reason is that you and the other co-owner may be at odds. When you dislike someone, it’s often difficult to bring yourself to do anything that you know would enrich them, even if it is financially advantageous for you as well. Even working alongside a third party, like a business law attorney, may not be enough to change your viewpoint.
They Can’t Afford to Buy You Out
Even if you and your co-owner both agree that their buying you out is the best option, they might not have the money to afford that purchase. While that presents a problem, it is, in some ways, the best problem to have because at least both sides want the same thing.
When you and your co-owner both want the same thing, you are more likely to find a solution to move forward.
They Feel They Can Get More Money By Selling to Another Party
Your co-owner wants to leave, and you have the funds to make them a fair offer on their share of the business, but they don’t want a fair share. They want to make as much profit as possible and are looking for a wealthier person to sell to. It’s an understandably frustrating position to be in.
They Want to Close the Business Instead of Selling to You
One last possible, albeit uncommon, situation that may occur is one in which the other owner wants to sell or close the business entirely as opposed to seeing it continue. Usually, a co-owner is okay with the other owner’s maintaining the company after they leave, but if it is family-owned or has a trademark tied to the person leaving, they might prefer to close the business and let you start a new one independently.
If you and your fellow co-owner cannot reach an agreement regarding how to separate ownership, the attorneys at Lusk Law, LLC may be able to help. Contact our Frederick, MD, law firm at (443) 535-9715 to talk to our experienced legal team today.
Potential Solutions When a Co-Owner Refuses to Buy Or Sell
These types of disagreements can be resolved in several ways. When working with the team at Lusk Law, LLC, the first thing we will do is read over your business contract to determine whether it has an escape clause, a built-in way to end the agreement altogether. If present, the clause may require you or your partner to buy or sell in certain circumstances. For example, some contracts may have provisions that state your business partner must offer to sell to you before anyone else or that they must accept an offer of a certain value.
If the contract offers a solution, that is usually the best way to resolve issues of future ownership. However, if it doesn’t, the following alternate approaches may work instead:
Offer to Do All the Work and Cover All Expenses
Dissipating a contractual agreement requires nearly as much work and money as creating one. Your co-owner might be more amenable to letting you buy them out if you agree to cover any costs involved, handle any business filings, and pay the difference in taxes they may owe.
Ask for Mediation
When problems have built up over time, they may not be easily resolved without the assistance of a third party. A professional mediator may be able to help you find a solution that works for both parties.
Partition the Business
Though it is rarely optimal, partitioning the business may resolve problems when other options won’t. In doing so, you’ll each take ownership of a portion of the company, assuming it can be separated reasonably. For example, if your business owns a building, you might agree to let the other co-owner keep possession of that real estate while you take possession of the remaining parts of the company. You’d have to restart your branch of the business somewhere else, but you’d be able to keep the name and continue running it like normal.
Sell the Business to Another Party
It’s another uncommon solution, but selling the business to someone else may be your only choice in some circumstances, and it will assure that you and your co-owner receive fair compensation for the value you put into it. With that money, you might be able to form a new business in the same field, though you will have lost business contacts, trademarks, and other benefits of continuity.
Contact Lusk Law, LLC, to Consult with a Business Law Lawyer
Advocates for Life’s Obstacles and Opportunities
If you co-own a business, a conflict between you and your partner can create further issues should one of you wish to leave the company. The experienced business law attorneys at Lusk Law, LLC, will help you find the best solution to these problems.
When facing conflict over how to separate ownership of a business, don’t wait. Contact our law firm at (443) 535-9715 to explore potential solutions.