My partner and I started a business together as a sole proprietorship, both of us owning equal shares. We haven’t yet formed a private limited company. Now, he wants to leave and is asking for a share in the new company if I continue running it. Is this a common practice? What are my options if it’s not? If it is, how do I negotiate fairly?

While there’s no legal obligation for you to share profits in a new company, it’s not uncommon for departing partners to seek compensation for their contribution to the existing business. You can either negotiate a fair buyout based on his share of the existing business’s assets and goodwill or, if a buyout isn’t feasible, reach a mutually agreeable agreement on his future involvement (like a consultancy role) and potential share in future profits.