You and your business partner have weathered many storms together in the past decade or so. Your combined resources bought several mobile home parks and a chain of convenience stores, all of which are doing quite well.
But lately, things have changed between the both of you. You have noticed that your partner has begun contributing significantly less effort into your business projects. When you get together to discuss future projects, your partner appears unwilling to commit further time or resources to expand your business. In fact, if you are reading the situation right, you believe that your partner is ready to bail. What are your options to end your business partnership?
Determine both partners’ goals
There is no way around it — this requires a very frank discussion with both parties’ cards laid out on the table. Your goal is to continue to manage what you jointly own and expand when the opportunity is right. If your partner has a different goal, e.g., sell your holdings and head off to Hawaii to retire, then it is time to tell you straight.
Keep it civil – stay friendly
There is nothing to be gained by ranting or raving at one another. These things happen. People’s needs and motivations change, and all must adapt to survive in a very competitive world. If your partner does indeed want out, the goal now must be to strategize an exit plan that meets both of the partners’ needs.
Be guided by your contracts – review your partnership agreements
Ideally, when the two of you hitched your wagons to the same star, you had the presence of mind to draft a business succession plan. This plan should list what must be done to separate your assets and end your business ties. Use whatever contracts are in place as the blueprint for your break-up, but always remember to consider the state of the business first before making any rational decisions.
Remain flexible for the future
Maybe you can arrange to buy your partner’s interest out over time, or in a lump sum by taking out a loan. You may also be able to take on another partner whose goals still closely mirror your own. Keep in mind that there is no one-size-fits-all answer to ending a business partnership, so remain open to options that may exist. It is always wise to meet with an attorney if you want to end a business partnership. Contact Hart King today, to see how we can help.