Like all good things, even business partnerships must come to an end now and again. It could be that you and your partner are having too many disagreements over fundamental business decisions. Or perhaps your partner isn’t pulling their weight in the business and slacking off. It could even just be that your styles don’t mesh and it’s causing too much strain at the workplace.
While it may not be something that you anticipated when you first went into business, if the time has come, you owe it to yourself and your partner to dissolve things the right way. There are numerous pitfalls to avoid in bringing such a business arrangement to a close, so you’ll need to stay cool and calm in order to make as clean a split as you possibly can.
Start By Reviewing Your Partnership Agreement
That partnership agreement is a legal one, so you’ll want to review the language there to ensure that you’re following the rules. Remember that this document should have been drafted before you went into business with your partner, so if you’re missing this, you’ve now got your work cut out for you. If you don’t have a partnership agreement in place already, you’ll have to work with your partner to settle terms (much like a divorce). It might be worth going to mediation in these cases to work out a solution.
Either way, you will need to have a talk with your partner about whether or not and how you’re going to dissolve the business. In some cases, you might be able to sell your business (in which case dissolution won’t be necessary). In other cases, though, bringing things to a close works best, and you’ll have to determine a timeline for this proposed dissolution to happen.
Filing Your Documents
If you decide to move ahead with dissolution, there’s paperwork you’ll need to get done. The dissolution form is what you’re looking for, and while specifics might vary based upon your state, you’ll need to complete this form as a step to formally ending your partnership and protecting yourself from certain liabilities and debts.
Send Out The Word
The next step will be to notify the other parties who will be affected by the end of your partnership — employees, contractors, customers, and the like. It will be beneficial to all involved if you have a plan for preserving goodwill and enabling a smooth transition after things come to an end.
Settle Your Accounts
Last, but certainly not least, you’ll need to close up all of those business accounts. Make sure the debts are paid, distribute assets as mandated by whatever agreements you have in place, and, in the event there isn’t quite enough money to cover everything, you might want to reach out to an attorney for business partner disputes for advice on how to settle everything fairly.