what are the protocols for a partnership to let go of a partner?

The formalities of the documents that are required depend on what type of entity your business operates under. Regardless, you need to have a negotiated separation agreement and consent to termination of any interest in the future operation of the business.

If you have an LLC, a separation agreement and consent are going to provide the LLC protection against any further claim of ownership by the partner, and you will of course do any amendments to the public filings with the secretary of state's office the remove the member's interest and to remove the member's name from the public record.

Immediately after the separation agreement, the LLC members need to meet, sign and adopt a new Operating Agreement, sometimes captioned as an LLC Agreement.

Ownership must be relinquished by the departing member/partner, and in an LLC, the statement of beneficial ownership must be amended.

If you have a corporation, the process is more complex, requiring meetings and stock buyback in accordance with any restrictions you may have. If you are a partnership, the process will have other requirements. However, I picked the LLC for the purpose of this answer in that you did not state the type of entity that your business operates under, and at least in my jurisdictions, the LLC is the most popular.

Finally, do not forget waivers of accounting and partition, as well as mutual releases, preventing any future litigation over the departure of the partner.

This answer is provided for informational purposes only. True legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction and with experience in the area of law in which your concern lies.

Mr. Myers' answers aren't wrong. They're just not quite to the point, and some of them aren't expressed in quite the same terms we use in Texas.

Basically the starting place is to ask whether you have a written partnership agreement. Typically those govern such things as withdrawal/buyout rights on terms negotiated when the partnership was created.

However, it's altogether common -- and by no means illegal, just perhaps less than wise -- for partnerships to have been set up more informally, without a written agreement, or without one that covers these sort of issues.

In that case there is a statute -- the Texas version of the Uniform Partnership Act, which is part of the Texas Business & Corporations Code -- which has a set of "default values" for all of these sorts of questions.

If you haven't invested in a lawyer's help to get your business started, you almost certainly are going to need one now. If the atmosphere is still good and all the partners are still agreeable, one lawyer -- with waivers of potential conflicts from everyone -- could potentially guide all parties through the exercise of getting one of them successfully out of the business. More likely, and especially if things are tense or outright hostile, the remaining partners need a lawyer and the withdrawing partner needs his own lawyer.

Shortcutting this -- trying to do it without legal advice -- is very, very, very likely to get you into complicated and expensive lawsuits. It's like asking an eight year old to fix a car transmission: The job just requires a certain amount of expertise.

I suppose I should also give you the short, if oversimplified answers, to the questions you actually asked. (Many lawyers, including me, have a habit of answering the questions we think you SHOULD have asked, which makes clients fume at us.)

If there's no provision in the partnership agreement to the contrary, nor other agreement now among the partners, then any withdrawing partner can compel the dissolution of the partnership and the winding up of its business. That means distributing the partnership assets owned by the business to its individual partners. All are generally going to remain personally liable on the business' debts. The ones who didn't want to leave can try to restart the business by re-contributing the assets that were distributed to them.

This is fair but ugly, and it's often disastrous in actual practice. But that's the "default value" provided by the statute when the parties haven't otherwise agreed, or can't agree now. Even that ugly result often ends up in litigation when done less than skillfully. So there's usually ample motivation for the remaining partners to try to buy out the departing one in order to avoid a dissolution (even if it's very brief).

A good lawyer can not only help you understand and comply with the legalities, he or she can help you devise and negotiate a solution that makes more sense for everyone. Use the internet to help you find a lawyer, but don't expect free consultations on the internet to substitute for hiring someone who can closely study your specific situation and communicate with you under attorney-client privilege. You need counsel.