In Texas, co-owners separate in one of three ways: a negotiated buyout, the exit terms in their company or partnership agreement, or a lawsuit asking a court to order a buyout, receivership or winding up. Which path is open depends mostly on your entity’s governing documents.
Can I just walk away from my LLC?
Not in the way most owners assume. Under the Texas Business Organizations Code, an LLC member generally cannot withdraw unless the company agreement allows it. Even if you stop working in the business, you keep your ownership interest — and the other owners keep control. That is why the company agreement, if there is one, is the first document we read.
Partnerships differ. A Texas general partner can withdraw. But withdrawing in breach of the partnership agreement can make that partner liable for damages, and the redemption price is set by statute unless the agreement says otherwise.
What if our agreement has a buy-sell clause?
Then the clause usually controls: what triggers a buyout, how the business is valued, and how payment works. Disputes often come down to the valuation method — whether it uses book value, a formula, or an appraiser, and whether discounts for a minority stake or lack of marketability apply. Small wording differences can move the price by hundreds of thousands of dollars.
What if there’s no agreement, or the other owner won’t follow it?
Then the options narrow and litigation becomes more likely. Common claims in a Texas business divorce include:
- Breach of the company or partnership agreement, such as withheld distributions or ignored voting rights.
- Breach of fiduciary duty, which partners owe each other. Whether LLC members and shareholders owe each other formal duties depends on the facts and the governing documents.
- Derivative claims on behalf of the company, for example to recover money a controlling owner diverted.
- Judicial winding up, which a court may order when the business’s economic purpose is being unreasonably frustrated or it is no longer practical to run it under its governing documents.
- Receivership, an extraordinary remedy where a court appoints a neutral party to protect company assets.
What should I do first?
Before you confront your co-owner:
- Gather the formation documents, company agreement, minutes, tax returns and bank statements you can lawfully access.
- Do not take company money, files or clients. Self-help often hands the other side a counterclaim.
- Write down a timeline of who did what, and when.
- Get advice on valuation before negotiating a price.
Does a co-owner’s marital divorce affect the business?
It can. Texas is a community property state, so a co-owner’s spouse may claim part of an ownership interest in a divorce. A well-drafted buy-sell agreement gives the other owners the right to buy that interest back.
How long does a business divorce take?
A negotiated buyout can close in weeks. A contested case usually runs one to two years. Many settle once both sides have a credible valuation.
From our case files
- Founder buyout for a fraction of the demand. The opposing founding member demanded roughly three times what he ultimately received. The buyout settled in the upper six figures and left our client as sole owner (2025).
- Exit without a punishing noncompete. In a crypto exchange business divorce, our client was bought out for six figures without accepting the other shareholder’s earlier offers, which came with onerous non-competition restrictions (2025).
- Seven-figure buyout across several companies. We represented a tech client in buying out one of three members across several jointly owned businesses (2024).
- Hotel and motel LLC breakup. Our client successfully bought out the other member in a contested LLC breakup lawsuit (2022).
Client names are withheld for confidentiality. Every case turns on its own facts, and past results do not guarantee a similar outcome. See more representative results.
The Burk Law Firm represents owners in LLC, corporate and partnership breakups across Texas. Call (512) 306-9828.
Related: What Can a Minority Owner Do When Frozen Out of a Texas Company? · What Should a Texas Buy-Sell Agreement Include? · Corporation, LLC & Partnership Disputes · What Is a Breach of Fiduciary Duty in Texas?
This article is general information, not legal advice. Reading it does not create an attorney-client relationship.