When Your Business Partner Stops Responding: Demand Letters Before a Full-Blown Lawsuit
There is a specific kind of stress that comes from a “silent partner” who is not supposed to be silent.
You email them for signature on a contract, and hear nothing.
You send an updated P&L, no reply.
You raise concerns about missing money or new deals they are cutting on the side, and the conversation just dies.
At some point this is no longer normal busyness or personality clash. Silence becomes strategy. And if you own a closely held company together, unchecked silence can be a way to freeze you out, stall you until opportunities pass, or quietly re-route value somewhere else.
This is the space for a demand letter. Not yet a lawsuit, but no longer a casual “hey, can we talk?” A demand letter is the hinge between business divorce and full-scale litigation: the moment you state, in writing, what is wrong, what you want fixed, and what happens if they continue to ignore you.
This guide walks through how to think about an unresponsive partner, what the legal framework looks like in closely held companies, what a pre-suit demand letter can realistically achieve, how to structure it, and where it fits with direct and derivative claims. There is a concrete template you can adapt, and a Q&A at the end.
What “my business partner stopped responding” usually signals
Partners go quiet for different reasons.
Sometimes it is benign: burnout, family crises, inbox chaos. Sometimes it is conflict avoidance: they know there is a problem and do not want the fight. Sometimes it is positional: they are trying to push you into buying them out, accepting a lowball deal, or simply giving up.
In closely held businesses, the line between personal relationship and fiduciary relationship matters. In most jurisdictions, controlling shareholders, directors, officers, managing members, and general partners in a closely held company owe fiduciary duties of care and loyalty to the company and, often, to each other.(McLane Middleton) They are supposed to act in good faith, with candor, and without self-dealing.
Total silence about material decisions, combined with control over money or information, is rarely compatible with those duties. It is also rarely compatible with basic contractual obligations in operating agreements, shareholder agreements, or partnership agreements that require participation, reporting, or joint approval for key moves.
So while you do want to rule out innocent explanations, you should treat prolonged, selective non-responsiveness on important business issues as a governance problem, not just a social one.
The legal frame: contracts, duties, and who is actually harmed
Before you write anything, it helps to know what “box” your problem falls into.
First, look at your governing documents. That may be a partnership agreement, LLC operating agreement, shareholders’ agreement, or a hybrid founders’ agreement. They typically address capital contributions, management rights, voting, deadlock, buy-sell triggers, information rights, and dissolution. When a partner stops responding to meeting calls, capital calls, signature requests, or reporting obligations, they are usually breaking explicit or implied promises in these documents.
Second, think about duties. In closely held businesses, courts and commentators often recognize that those in control owe fiduciary duties to minority co-owners: duties of care, loyalty, candor, full disclosure, and fair dealing in managing the company.(McLane Middleton) Total stonewalling on information or deliberate exclusion from decisions can be part of a broader pattern of oppression and breach of duty.
Third, separate harm to you personally from harm to the company. This matters because some claims are “direct” and belong to you as an individual owner, while others are “derivative” and must technically be brought on behalf of the company against insiders who hurt it.(Delahunty & Nash LLP)
Examples of direct harm: your partner freezing you out of distributions owed to you, diluting only your stake, or violating one-off promises made directly to you.
Examples of derivative harm: your partner siphoning company assets to another entity they control, refusing to pursue profitable opportunities for the company while benefiting a competitor, or refusing to act on obvious wrongdoing that hurts the entity as a whole.
Why this matters for demand letters: in many jurisdictions, before you can bring certain derivative claims you must first make a written demand on the board, managers, or other members to take action, and then wait a specified time.(Litico Law Group) A well-crafted demand letter can double as that statutory demand and as a practical “wake-up call.”
Before you write: get your facts and documents straight
Anger is a terrible drafting assistant. Facts are a good one.
Before sending any formal letter, pull together the materials that describe (i) what the relationship is supposed to look like and (ii) what has actually been happening.
That generally means the company’s formation documents and agreements; cap table and ownership records; minutes or at least emails of past decisions; the financial picture you can see; and the communications trail where you have tried and failed to get responses. Include dates, specific unanswered questions, missed meetings, unsigned documents, and ignored requests for information.
If there are concrete events that worry you — unexplained transfers, contracts they signed alone, clients diverted to a different entity — write yourself a simple internal timeline. Who did what, on what date, with what immediate effect on the company or on you.
Finally, be clear with yourself about your goals. Do you want them to re-engage and cooperate? Do you want a structured exit or buyout? Are you trying to force disclosure of books and records? Or are you building a record for probable litigation or dissolution?
A demand letter that knows what it wants is easier to write and more likely to work.
What a demand letter can realistically do in a partner dispute
A demand letter is not magic. It cannot turn a bad partner into a good one. But it can do several important things.
It forces your partner to confront, in writing, that you see a serious problem, that you have documented it, and that you are prepared to do something beyond sending reminders. Business litigators and bar articles routinely describe demand letters as the first formal step toward litigation or corporate crisis; ignoring them often signals unwillingness to engage in good-faith settlement and prompts escalation.(Davis Business Law)
It creates a clean record. Courts, arbitrators, mediators, and future lawyers all like contemporaneous documents. A letter that calmly lays out the history, cites key provisions of your agreements, and gives them a chance to cure can be powerful later, especially if they continue to do nothing.
It may satisfy pre-suit demand requirements. As noted above, derivative suits bringing claims on behalf of the company often require a written demand to managers or the board, giving them a chance to take corrective action, before you can file.(Litico Law Group) The right kind of letter can serve that function.
It sometimes works. A partner who has been avoiding engagement may take things more seriously once they realize silence is now being read as breach, not just busyness. Their own counsel, if they have one, will almost certainly tell them not to throw away a well-documented demand.
And, if it does not work, it clarifies that you did your part. You tried to fix things short of litigation. They declined to participate.
Tone and audience: businesslike, not theatrical
You are not writing for catharsis. You are writing for your partner, their future lawyer, and possibly a judge.
That usually means a tone that is first-person but professional. You do not need to pretend you are not upset; you do need to keep the focus on facts and obligations rather than on insults and diagnoses of their personality.
Assume that whatever you write could be read aloud in a courtroom or attached as an exhibit. Ask yourself: if someone neutral read this, would they see a business owner making a serious, grounded request, or someone venting?
The more serious the stakes — long-term deadlock, suspected misappropriation, investor money on the line — the more useful it may be to let counsel send a parallel or follow-up letter under firm letterhead. For many smaller disputes, a well-crafted letter from you personally is a good first move.
Structuring a demand letter to a non-responsive business partner
Most effective letters in this context follow a predictable arc.
You start by identifying the parties and the company. Name your entity, your role, their role, and the basic structure of ownership and management.
You describe the original deal. Summarize, in a few sentences, what you both agreed to do: who would manage, who would contribute capital or sweat, how decisions would be made, and what the relevant agreements say about communication, information, and fiduciary obligations.
You explain the pattern of non-responsiveness. Give dates and examples: unanswered emails about specific decisions, missed meetings, failure to sign particular documents, lack of response to capital calls, refusal to share financials.
You explain why that matters. Connect their silence to concrete harm or risk to the business and to you: missed opportunities, inability to close deals, inability to pay taxes, uncertainty about obligations, or suspicion of undisclosed activity.
You state, calmly, that their conduct appears to breach specific provisions of your agreement and, where applicable, their duties as a manager, director, or partner. You do not need to litigate every legal theory, but anchoring your concern in written obligations and broadly recognized duties of loyalty, care, and candor helps.(McLane Middleton)
You set out what you want. That might include immediate responses on specific questions, delivery of books and records, participation in a meeting, agreement on a buyout process, or a commitment not to take certain unilateral actions.
You set a deadline and outline next steps. Give a reasonable period for them to respond, and explain that if they do not, you will consider formal steps: calling a meeting under the bylaws, seeking access to books and records, pursuing dissolution or buyout under your agreement, or initiating litigation or arbitration, including derivative remedies where the company is being harmed.(Litico Law Group)
You reserve your rights. A simple sentence that you are not waiving any rights or remedies by sending the letter is usually enough.
What follows is a template you can adapt.
Demand letter template: unresponsive business partner
This is drafted for a closely held LLC, but you can easily adjust “LLC” to “corporation” or “partnership,” and “operating agreement” to whatever governs your entity.
[Your Name]
[Your Address or City]
[Email Address]
[Date]
[Partner’s Name]
[Partner’s Address or City]
Re: Request for Response and Action Concerning [Company Name]
Hello [Partner’s First Name],
I am writing in my capacity as a [member / shareholder / partner] of [Company Name], and as your co-owner in this business.
As you know, we formed [Company Name] on [formation date] and agreed to operate it under the [Operating Agreement / Shareholders’ Agreement / Partnership Agreement] dated [agreement date]. Under that agreement, we both committed to contribute to the business, participate in major decisions, and act in good faith to protect the company’s interests and our mutual investment.
Over the past [time period], I have made repeated attempts to reach you about important matters relating to the company, including:
– [Very short description of issue one, for example “the proposed lease for the new office space sent on [date]”].
– [Very short description of issue two, for example “the draft contract with [Customer] on [date] that requires both of our signatures”].
– [Very short description of issue three, for example “requests on [dates] for updated financial statements and bank information”].
These and similar messages on [other dates if helpful] have gone unanswered. You have also missed or not responded to [describe any key meetings, capital calls, or formal notices], and you have not provided the information or participation that the company needs from you.
Your lack of response is making it difficult, and in some cases impossible, to manage [Company Name] responsibly. It has already led to [describe concrete consequences, for example “delays in signing contracts,” “confusion for our staff,” “risk of late filings or payments,” or “concerns about transactions I cannot verify without your input”]. Continued silence exposes both of us, and the company itself, to significant risk.
Under our agreement, and under the general duties that owners and managers of closely held businesses owe to each other and to the company, you are expected to act in good faith, exercise reasonable care, avoid self-dealing, and keep your co-owners reasonably informed about matters affecting the business. Persistent non-responsiveness on important issues appears inconsistent with those obligations and with the expectations on which we formed this venture.(McLane Middleton)
I would prefer to resolve this without involving courts, regulators, or third parties. To move forward constructively, I am asking that you do the following:
- Confirm in writing, by [specific date, for example ten calendar days from the date of this letter], that you have received this letter and that you remain willing to fulfill your obligations as a [member / shareholder / partner] of [Company Name].
- Provide, by that same date, a substantive response to the pending items listed above, including your position on [briefly restate the most urgent decisions] and any information I have requested that is necessary to understand the company’s current financial and contractual situation.
- Either:
– Propose at least two dates and times within the next [two weeks] when you are available for a meeting (by video or in person) to discuss the company’s status, your involvement, and any concerns you have; or
– If you no longer wish to be involved in the business, state that clearly so that we can discuss possible buyout or exit terms in an orderly way under our agreement.
If I do not receive a timely and substantive response, I will have to assume that you do not intend to re-engage voluntarily. In that case, I will consider the options available to protect the company and my interest, which may include calling formal meetings under the [Operating Agreement / Bylaws], seeking access to books and records through legal channels, pursuing remedies for breach of our agreement and duties owed to the company, and, if necessary, initiating proceedings for dissolution, buyout, or other relief on a direct and/or derivative basis.(Litico Law Group)
Nothing in this letter is intended to waive any rights or remedies I may have, all of which are expressly reserved.
I hope we can address this now and avoid that outcome. Please let me know, in writing, how you propose to proceed.
Sincerely,
[Your Name]
[Title, if any]
[Company Name]
You can make this sharper or softer depending on the situation. In a high-trust relationship that has simply drifted, you might omit references to breach and litigation and focus on the practical need to reconnect. In a high-risk scenario involving suspected misappropriation or oppression, you may want to be more explicit about the factual concerns and about the kinds of claims you are considering.
Frequently asked questions about demand letters to unresponsive partners
Is email enough, or should I send a physical letter?
Email is fast, and if email has been your normal channel, courts will not ignore it. But for a serious demand you usually want something more formal as well: a letter sent to their last known business and home addresses by a trackable method, plus email. That gives you proof they were notified and avoids later claims that your message went to spam.
Should the demand letter come from me or from my lawyer?
Either can work. A letter from you can feel less like a declaration of war and may appeal to the personal relationship. A letter from counsel under firm letterhead signals that you are already getting legal advice and are closer to litigation. In larger or more complex disputes, many owners start with their own letter and then have counsel follow up if there is no useful response.
What if we never signed a written partnership or operating agreement?
You can still have enforceable rights. Oral or implied agreements, combined with statutory default rules for partnerships, LLCs, and corporations, create obligations even when nothing is written. Your demand letter can describe the arrangement in plain language: who contributes what, how decisions have historically been made, and what basic duties of good faith and fair dealing exist in closely held businesses.(Holland & Knight) You lose the convenience of quoting specific clauses, but you do not lose the ability to demand information, participation, or a clean exit.
What if my partner is also the controlling manager or majority shareholder?
That is common in closely held companies. In many jurisdictions, controlling owners and managers owe fiduciary duties to minority co-owners, including duties not to freeze them out, hide information, or divert value unfairly.(Wegman Hessler Law Firm) Your letter can explicitly call out both contractual breaches and breaches of duty. It can also serve as the “demand” that some statutes require before you can bring a derivative claim on behalf of the company to challenge their conduct.(Litico Law Group)
Should I accuse them of fraud or theft in the letter if I suspect it?
Be careful with loaded accusations you are not prepared to prove. If you have concrete evidence of misappropriation, you can describe the specific transactions and why they concern you, and say that you are investigating potential breach of duty or misuse of company assets. Broad labels like “fraud” and “theft” can inflame the situation and, if overstated, create risk for you. Stick to facts and to terms that track your agreements and duties.
How long of a deadline is reasonable?
It depends on urgency, but ten to fourteen calendar days is common. Shorter deadlines may be justified if there is an imminent closing, regulatory filing, or other time-sensitive event. Longer deadlines may be appropriate if you are asking for extensive financial information. The key is to pick a date, state it clearly, and then act consistently with what you said once that date passes.
What if there are several partners and only one is unresponsive?
Address your letter primarily to the problematic partner, but consider copying other key owners or directors where that makes sense and your agreements allow it. In some situations, especially where the company itself is being harmed, your real audience is the group, not just the individual. For derivative-style concerns, the demand often goes to the board or the managers collectively.(Litico Law Group)
Can I remove or squeeze out my partner if they ignore the letter?
Only if your agreements and applicable law give you that power. Some operating agreements and shareholder agreements include buy-out triggers or removal mechanisms for material breach, non-participation, or deadlock. Others do not, in which case you may need judicial involvement to force a separation. Your demand letter should not promise remedies you do not actually have, but it can reference the mechanisms that do exist and your willingness to invoke them.
What if my partner never responds at all?
A non-response is, in itself, useful information. It suggests they are either unwilling to engage or relying on inertia. Once your deadline passes, you can escalate according to your plan: convene a formal meeting under the governing documents, file a books-and-records action if you are being denied information, bring a direct claim for breach of contract or duty, or initiate a derivative or dissolution proceeding where the company is being harmed.(Litico Law Group)
Will sending a demand letter make litigation inevitable?
Not necessarily. Many disputes settle precisely because someone finally wrote a clear demand that forced the other side to confront the situation. Some partners, especially those who are conflict-avoidant or disorganized rather than malicious, respond better when expectations and consequences are laid out in black and white. At the same time, you should not send a serious demand letter as an empty bluff. You do not have to sue, but you should be genuinely prepared to take further steps if they ignore you.
How do I keep this from destroying the personal relationship completely?
Sometimes you cannot. A business breakup is, by definition, a strain on any personal relationship attached to it. What you can do is keep the tone professional, avoid gratuitous personal attacks, offer reasonable paths forward (such as meetings or structured exits), and make clear that your goal is to protect the business and your investment, not to humiliate or punish them. If there is anything salvageable in the relationship, that approach preserves it better than a scorched-earth letter ever could.
When a business partner goes dark, doing nothing is a decision. It is a decision to tolerate drift, risk, and potential abuse indefinitely. A thoughtful demand letter is the opposite decision: a decision to put the situation in writing, set a timeline, and either restart the partnership on clearer terms or move it toward a clean end. It is not yet war. It is you drawing the first real line.