Entrepreneurship & Small Business

Ways to exit a business with multiple shareholders

  • Last Updated:
  • Oct 28th, 2018 6:06 pm
Deal Guru
Aug 2, 2010
13060 posts
Here 'n There
It's binary. Either you honour your shareholders agreement and put more money in or you don't. If you do the former, it sounds like you might be throwing good money after bad, if you do the latter you may hasten what is inevitable anyway but create bad blood with and your partners (which may or may not matter to you) and be sued by them.

You don't appear to want to invest more money in the business so I would sit down and talk to your partners and tell them that it's time for all of you to face the music regarding the business and decided if it's worth going forward. Maybe they feel the same way as you. Perhaps they want to go on and would be happy to receive your shares for the nominal cost of $1 total and let you out of your shareholders agreement, thereby increasing their respective shareholdings. They should want to do that if they have faith in the business. Of course if they are not interested in that proposition then all you can do is either keep investing or not honour your agreement. If the latter the business could go bankrupt if they can't pony up your portion too and then they could sue you.

You don't need to waste money on a lawyer to deal with any of this.