Business break-ups can be amicable but often are the opposite, proving complicated, acrimonious and litigious. The business environment has not been helped in the past 18 months due to difficult developments stemming from COVID-19. An assortment of challenges bombarded companies and made their survival, sometimes, tenuous.
Self-examination often is the result among business owners and their partners. Sometimes, they wonder just whether they want to remain in business together as differences continue to mount. Those differences may be regarding the company’s direction, competing visions, or even a general distrust for how duties were handled.
Make the dissolution a quick one
Trust your instincts, but also follow your head if you sense a potential dissolution of your business partnership. Here are some essential points to understand and home in on:
- Remain alert to the subtle and not-so-subtle signs that your business partner seeks to depart. If you can talk things over, do so in an effort to part on amicable terms. However, conflict and tension may make such a conversation impossible and lead to a lawsuit.
- Attempt to make the business dissolution a quick one. Near endless negotiations can bog down the break-up, proving unproductive and even detrimental.
- Study the partnership agreement and have a firm understanding of its details. This may include reviewing loans, contracts and leases. You do not want to be stuck with having to deal with such responsibilities upon a business split.
- If minimal discord exists, consider the potential solutions of selling your share of the business to your partner or acquiring your partner’s share. If you have the ability, the two of you may work together on one last deal: selling your company.
- Protect yourself by enlisting the guidance of professionals such as an attorney and accountant. In examining the books, an accountant may determine the general health of your company. A skilled attorney may help in an assortment of legal matters, including reviewing the partnership agreement and creating a dissolution agreement.
Try to walk away from this situation with your head held high. You did not expect that your business would end this way, but it did. Take every step to ensure self-preservation and move on to your next business challenge.