Being a 50% partner means you can fire the designer. If the partner with the personal relationship isn't willing to, tell him you will do the honors.
I think a restructuring is in order. You can either leave (dealing with your half of the company in whatever way is necessary), or restructure the company so that you (as the person who seems to understand and run the business) have all of the decision power. Of course your partner will need something in return for this, be it cash, or the threat of leaving. Another option is to mutually agree on a 3rd board member for dispute resolution. Make sure this person can remain objective and make decisions that are best for the company.
Unfortunately I can't give you any advice on how to deal with your personal friendship with this person. You probably know best the way to amicably approach the situation with him.
I think a restructuring is in order. You can either leave (dealing with your half of the company in whatever way is necessary), or restructure the company so that you (as the person who seems to understand and run the business) have all of the decision power. Of course your partner will need something in return for this, be it cash, or the threat of leaving. Another option is to mutually agree on a 3rd board member for dispute resolution. Make sure this person can remain objective and make decisions that are best for the company.
Unfortunately I can't give you any advice on how to deal with your personal friendship with this person. You probably know best the way to amicably approach the situation with him.