Employees are typically hired under at-will employment laws. This means that they get to quit whenever they want. While it’s customary to give a notice of two weeks, it’s not actually required.
Likewise, a sole business owner can decide to shut down their company whenever they want. If they opt to retire, to open another business or just to stop running the company, that’s fully up to them. They can do it any time.
But what if you’re a co-owner with a business partner? Are they also allowed to quit whenever they want, even if it would be detrimental to the company?
Another reason for a partnership agreement
Partnership agreements are important for many reasons, from defining ownership percentages to settling on roles and responsibilities within the company. If you and a friend start a business together, your best move is to draft a legal partnership agreement when you do.
As you do, you can add to that agreement how and why someone can exit the partnership. If you want to be allowed to leave with no warning, you can put that in the agreement. You can do that if you want to say that someone can only leave if they sell to a third party. You may even just want to say that any partner who exits has to provide ample warning in advance, such as six months, before turning their ownership percentage over to the remaining partner.
You can set this up in the way that works best for you. Just make sure you do it in advance and that you know how the partnership agreement defines your rights and obligations.