[parttimepro]

Whoever is being asked to leave will still own 20% of the company. This can lead to very awkward situations, so that person is usually "bought out." The other owners negotiate with him/her to buy back that 20%. Neither party has an obligation to buy or sell (unless this was agreed upon when the company/partnership was first formed), so the person being forced out usually has some negotiating leverage. Basically, the remaining owners of the company think it's going to increase in value as a result of their work, and they don't want you leeching 20% of that value off of them. They want to buy you out as soon as possible, before the value increases. Also, they're kind of paying you to go away. So generally, a 20% owner who's forced out will receive more than 20% of the value of the company.

This assumes we're talking about the corporate world, where the money involved is worth more than the relationships. If you have $200 equity in a $1000 company with some friends, and you want to keep them as friends, just settle for $200. See the documentary Startup.com for a situation where two friends buy out a third. The negotiations destroy the friendship, but the third guy does get an extra $100,000.