When you and your business partner launched your company, you remained had high hopes and aspirations. Success would come if you worked hard, understood the changing market and relied on a little bit of luck.
Well, it worked out like that for a while, but not as long as you had expected. Gradually, disagreements between you and your business partner crept in, displaying the cracks in your business’s armor. Eventually, those disagreements became one too many. Separation was the only solution, and now it is time to lay the groundwork for the break-up of your partnership, understand the signs and seek the best possible resolution.
Make a quick break, consult professionals
When you start a business, it is a good idea to anticipate a potential exit strategy. That could include selling your business, taking on a new partner and even breaking up the original partnership.
For the latter scenario, you must be in-tune to what is happening and home in on specific details of your partnership and your next steps. Here are some things to consider:
- Recognize the signs that your business partner intends to leave. Have those difficult discussions, talk things through and come up with a solution that you and your soon-to-be-former partner may not be happy about, but can live with. Litigation is possible, but you want to avoid that, departing on the best possible terms.
- Attempt to make the business split a quick one. Drawn-out negotiations can prove painful and costly, leading to avoidable complications.
- Know the partnership agreement inside and out. Thoroughly review business lease agreements, contracts and bank loans. It is not fair to be solely stuck with paying off certain bills. Protecting your interests is essential.
- To avoid litigation, you may consider three moves: buying your partner’s share, selling him or her your stake or, in working together on one last deal, selling the company.
- Seek advice from an attorney and an accountant. They can answer your questions as well as guide you on legal and financial matters. These professionals will protect you, help you determine the health and value of your business, and put in place a dissolution agreement.
A business split is not what you had wished, but you understood that such a development remained a possibility. Prepare to protect yourself during the dissolution of your partnership.
