Business partnerships allow two or more people to share in the obligations of running a company. Partners may enjoy a lifelong working relationship where they rely on one another. Unfortunately, not all business partners enjoy a healthy, lasting dynamic. In some cases, partners may find themselves at odds with one another. Disagreements about personal conduct or the future of the company could lead to one or both partners hoping to exit the partnership.
What are some of the ways to terminate a business partnership that is no longer productive and healthy?
1. Dissolving the company
Frequently, business partners who no longer work well together may choose to dissolve the organization they started together. Doing so is often the simplest way to terminate shared obligations and pursue new opportunities.
2. Arranging a buyout
In some cases, one partner may want to retire. Other times, their incompetence or misconduct may leave their partner unwilling to continue working with them. One partner can make use of the buy-sell agreement included in the initial partnership contract to acquire the other’s interest in the organization. One partner leaves the company with appropriate compensation, and the other assumes sole ownership.
3. Selling the company
Partnerships can flounder even when the business itself thrives. In such scenarios, those trying to end a partnership may want to consider selling the organization to an interested outside party.
There are benefits and drawbacks to each of these options. Business partners may need help reviewing documents and developing an exit strategy, and that’s okay. Exploring every option for ending a failing or frustrating business partnership can help partners who can no longer continue working together to find a way forward.
