I have a partner who did not do what he said he would do. Now he has equity but is uninvolved. What do I do? I'm really wondering if I should just dissolve the company and start a new one, but worried of the legality of this. Not looking to spend $10,000+ on legal fees to challenge their equity shares.
I can't tell you how many times I've written an answer like this before. Never confuse equity and ownership with employment. Although many people have both, they are not necessarily joined at the hip.
Is your question related to what your partner is not doing as an employee or as an owner? As an employee, he can be fired for not performing his duties. An owner can't be fired unless he's an employee. Hopefully you have a partnership agreement that deals with relative duties and what happens if either partner doesn't fulfill his duties.
Do you have a board? If so, then they can intervene. If just you and he are the board, then I'd hire a mediator to help you get through the crisis.
If you don't have a partnership agreement and mediation isn't successful, then, yes, dissolve the company, start a new one and hire a lawyer to draft a bullet-proof partnership agreement. $10k is small money to pay for peace of mind and for a successful company.