Can I force my partner to sell to me if they've stopped showing up to work?
Not automatically, and not just because they stopped showing up. A partner's ownership, meaning their shares, and their role as an employee or manager of the business are legally separate things, so their absence from day-to-day work doesn't by itself force them to sell their shares. Whether you can compel a sale generally depends on what your shareholders' agreement provides — some agreements include triggers tied to a partner ceasing to be actively involved, or a shotgun clause you could invoke to offer to buy them out.
Separately, if the non-participating partner is also an employee, their employment, as distinct from their shares, may be addressed under ordinary employment principles. Without a relevant contractual mechanism, forcing a sale of someone's shares against their will typically requires either their agreement or, in serious and persistent situations, a court application. Reviewing your shareholders' agreement, or getting one in place if none exists, is the essential first step.
Key takeaways
- Share ownership and day-to-day employment involvement are legally separate matters.
- A shotgun clause or similar trigger in a shareholders' agreement is usually needed to force a sale.
- The partner's employment status can be addressed separately from their shares.
- Without a relevant clause, forcing a share sale generally needs agreement or a court application.