My answer to What can I do with a co-founder that does nothing?
Answer by Ken Larson:
Execute an operating agreement and by doing so clarify the roles, contributions and responsibilities of the members and a process to vote a member out.
An operating agreement is a separate document, not controlled or required by the state or the federal government but very important to your company. It should be a simple, straightforward document you and you and your prospective partner(s) can draft yourselves It should cover such matters as % of ownership, how revenue will be distributed and other general matters, as well as who can commit the company in the form of credit cards, who signs checks on the company account and other administrative matters.
Buying out a partner should also be covered as well as adding new members if the need arises down the road. You can download a free example of an operating agreement from the BOX in the right margin of the following site:
I have seen many enterprises fail or go through terrifically hard times due to lack of an operating agreement. The parties should sign it after a review by a lawyer. It should then be notarized and made an official part of the company file.