Legally, I have no idea as I'm not a lawyer and even if I were I'm probably not even living in the same country, let alone the same state. You really need to ta

Legally, I have no idea as I'm not a lawyer and even if I were I'm probably not even living in the same country, let alone the same state. You really need to talk to someone qualified to answer that. Ethically...I think as long as you are above board and honest with all parties, explain the situation and what needs to happen, then you're probably OK. Running a business involves making hard decisions such as firing employees and dumping cofounders. If you can't face doing these things then you're not cut out for running a business (I've had to do it, and hated it). However it's important that even when you have to do these things that you are honest and as decent as possible at all times.