So you want to end your business partnership

It happens sometimes. Two (or more) people get together, they have a great idea, they start a business, and then somewhere along the way — things go south. Not with the business, but with them.

Maybe the business took an unplanned turn. Maybe one of them was acting unethically. Maybe the nuances of the disagreement are too complex to wrap into one explanation. Whatever the reason, they're looking to end the business partnership.

Review your business agreement.

If you're in a position like this, you might be looking for what steps you should take in order to civilly ask your business partner to step away. Or perhaps, they've announced they are stepping away and you're wondering about the next steps. This can vary depending on the reason for dividing, whether or not it's a mutual decision, and what the business itself actually is. But generally speaking, the steps to follow are these:

1. Review your business agreement. If it's your decision to end the partnership and you haven't discussed it yet, it's a good idea to be privy to the agreement and what steps are necessary to dissolve the partnership. If you have discussed it already, or it was their idea, this is the natural next step. There is likely a legal way to go about the ending of the partnership that requires certain steps, according to Business.com.
2. Discuss with the partner. If you are the one making the decision, be sure to be clear, honest, and direct. Although there's likely a personal level to the relationship, this discussion is about business. Remember to keep the issue about the problem, not the people, per Forbes.
3. File to end the agreement. Someone will need to file a dissolution form with the state in which the business operates. This will make things official.
4. Close and settle accounts.  Any accounts that have both of your names on them should be closed and any debts settled. This is more complicated if the debts are not paid off, and even more so if the former partner is not willing to be liable.
5. Make others aware. If you have other people involved in the organization, they should find out before the accounts are settled if it will have an effect on them. Otherwise, once all is signed and agreed upon, it's time to let the rest of the business know, as well as clients, customers, and the general public. This includes the government.

Once these steps are complete, the partnership can be considered dissolved in most cases. However, there are still complexities that come along with any agreements like these. The professionals at Donald W. Hudspeth, P.C. can help you through the messy parts of ending a business agreement and ensure all goes fairly and smoothly. Contact the Law Offices of Donald W. Hudspeth, P.C., today to learn more.

Categorised in: Dissolving a Business

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