A partnership can sometimes be one of the trickiest business formations. After all, no matter how similar your vision for the future of the company, no two people will ever have the exact same ideas on how to get there. Consider the following scenarios where two people may want to get out of a business partnership.
- Creative Differences – You each want to take the business in a different direction
- Personal Differences – A couple who are business partners may split up, or two relatives or friends may have a falling out
- Moving Long-Distance – If one business partner moves to another state or even country, will that affect the partnership?
- Uneven Distribution of Work – Do you feel like you do everything and your partner actually does more harm than good?
These are just a few of the reasons you may want to break free of your business partner. Unfortunately, you can’t just say “You’re fired,” and move on. There’s a lot more to dissolving a business partnership.
The Importance of a Partnership Agreement
The biggest factor, in this case, will be what was outlined in the partnership agreement as far as ending the partnership is concerned. Hopefully, things were spelt out clearly, but if not it may be tough to establish grounds for removing a partner or for how you split things such as profits, assets, and liabilities. Sometimes you may have to buy your partner out to get rid of him or her. At other times, your only option may be to walk away and start over.
Writing Up a Business Partnership Agreement
Whether you are starting your first partnership or have been burned in the past, knowing the importance of the partnership documentation should move you to seek legal counsel in drafting the agreement. If you are stuck in an existing partnership agreement, having a trained professional examine the document can help you to understand your options. Either way, Pokala Law is here to help. Call us today at 1-844-695-1487 to get competent answers to your business legal questions.