When a business partnership goes south, it can quickly become a messy nightmare. There are plenty of horror stories about business partners that end up at each other’s throats, tied up in litigation and mediation for years, much to the detriment of their business.
Fortunately, the dissolution of a partnership doesn’t have to mean the end of the company.
Stay cool, calm and collected
Dissolving a partnership is a legal process, and you have to approach it professionally. Don’t send angry texts or emails, don’t make any scenes and don’t do anything out of spite.
If your ex-partner is behaving erratically, copy whatever messages they send, but don’t respond. Cooler heads will prevail over time and the last thing you want is to be shown as the hothead stoking the fire that dissolved the partnership in the first place.
Find a mediator
There are certain hoops you need to jump through before the dissolution takes place. Hopefully you had a contract or operating agreement drawn up to help guide the dissolution but, if not, that isn’t the end of the world.
Hire an attorney or a mediator to help you and your ex-partner draw up the terms and conditions for the dissolution, and to help navigate the trickier questions like how much it will cost you to buy the liquidating partner’s portion of the assets and ownership.
Keep communicating
It’s really easy to hide away and not talk to your ex-partner, especially if you aren’t parting on the best of terms. But all that will do is delay the dissolution and cause more animosity.
During mediation, be sure to outline what you want to do with the business and, if it comes up, why you feel dissolution is the best course of action. Just saying “because you’re lazy” or “because you’re a jerk” isn’t helpful. Have specific, non-accusatory reasons and evidence in place.
Hire new people
Even if you feel like your partner wasn’t pulling his or her weight, the partner probably did help the business in some way. Was the stock monitored? Did the store open every morning? Did the partner act as the company’s accountant?
Whatever jobs were done still need to be done, and you cannot go it alone. Look into hiring a new employee or two to help pick up the slack and keep your company running during the dissolution of the partnership.
Protect your future
Think of your company’s future during mediation and negotiations. You will probably want a noncompete clause and you need to decide how your ex-partner will be involved in paying down any debt accrued while they were still on-board.
Decide how your ex-partner will be involved in the business after dissolution. As much as you may want the partner out of your life, you might need his or her help during the transition; so you don’t want to cut the partner loose just yet.
The dissolution process is only temporary and, as long as there are good reasons behind the breakup, your business will be better off for it. ●
Deborah Sweeney
CEO
MyCorporation.com
MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services.
Deborah writes about issues that affect companies of all sizes and shares tips that she has found to be useful in her own business endeavors.
(877) 692-6772
