When a business partnership is formed, the last thing on partners' minds is the possibility that one day that partnership will end. But life happens, plans changes, and not all partnerships survive the test of time.
There are many things to consider when parting ways. The personal and financial stakes can be very high when a partnership is ending. It is important for each partner to ensure that her or his individual interests are protected.
Here are some things to keep in mind as you face the dissolution of a business partnership:
- Contract review: The first place to look is the partnership agreement, which may address many key issues in the dissolution. In cases where there was no partnership agreement, an attorney can help negotiate a separation agreement. If no agreement is reached, an attorney can provide representation in court to dissolve the partnership.
- Business valuation: One of the most important tasks involved in a partnership dissolution is determining the value of the business. A qualified business valuation expert is critical to success.
- Allocation of assets and liabilities: This is based on the percentage of ownership, which is detailed in the partnership agreement or agreed to orally . Assets as well as debts must be divided. An attorney can help ensure that you don't assume a larger share of liabilities than you are contractually obligated to.
- Conflicts: Many partnership dissolutions are the result of disagreements or conflicts. When conflicts cannot be resolved through negotiation, it may be necessary to proceed to court. It is important to work with an attorney who can protect your interests in and out of court - even if you anticipate an amicable split.
- The future of the business: Whether one partner intends to buy the other out, or whether the business itself will dissolve, there are important issues that must be addressed.
When a partnership is not working, it may be best to move on to new opportunities. An experienced attorney can help you get through the process of ending a partnership, allowing you to move on to your next venture.
Chenoweth Law Group, P.C., represents clients who are facing dissolutions of partnerships and corporations. If you wish to speak to an attorney about your specific needs, please call 503-446-6261.