You and your business partner have decided to part ways. The reasons are numerous. Perhaps your partner isn’t delivering the results originally anticipated, or perhaps you work 60 hours a week; your partner works 20. Maybe your vision has changed or your skills are not compatible, or maybe you’re just plain tired of working with one another.
Whatever the reason, it’s always preferable to dissolve a partnership with as little acrimony, hurt feelings, and contentious litigation as possible. Mutual benefit is only possible when both parties are willing to negotiate honestly. Fortunately, following a few simple guidelines can make the process less antagonistic and more productive.
- Pull out the contract. Your partnership agreement should enumerate the terms and conditions needed to dissolve the partnership. In general, the contract should detail the process for dividing business assets and liabilities. A written partnership contract is always the first place to start because it outlines salient obligations, promises, and understandings — the terms you stipulated before becoming enmeshed in the rough-and-tumble of daily business.
- Communicate clearly. Call a face-to-face meeting and lay out your concerns and reasons for seeking an amicable dissolution of the partnership. Especially when family members are involved, such meetings may engender hurt feelings and mistrust. But business is business, and a diplomatic and straightforward discussion of the issues is preferable to hidden agendas, innuendo, and rumor. Perhaps the misunderstanding is yours and the partnership can be salvaged. You won’t know unless you talk — honestly and openly.
- Be generous. If you decide the partnership must be terminated, be willing to give a little. Split the last check. Don’t be stingy. Litigation is expensive in terms of time, money, and energy. Don’t let ego and heated emotions rule the day and cloud your judgment. After all, what’s the point of diverting thousands of dollars to lawyers and lawsuits when, for a fraction of the cost, you might settle your differences amicably?
One final word: Even if you aren’t filing lawsuits against one another, enlisting the aid of a competent attorney can help ensure that you’re moving in the right direction and outcomes remain equitable. If you’d like additional guidance, give us a call. We’re here to help, so that you can relax!