Ending a business partnership can be difficult for a variety of financial and personal reasons. After helping to form the business or otherwise playing a central role in its successful operation, leaving can sometimes be complicated and messy for all involved. Luckily, there are things you can do to make the transition much easier for you and the other partners. Here are five tips for ending a business partnership:
Start with Your Contract or Operating Agreement
If your business is on the smaller side and operating as an LLC, you most likely have an operating agreement in place as these are required in many states. Larger businesses will typically have more complicated contracts regarding your business partnership. In any case, it is common practice for the contract to include standard procedures for handling a partner leaving.
If your company was formed many years ago, it's most likely been a very long time since you've read over the contract. Re-familiarize yourself with this document in order to get a good handle on how to proceed with your departure, as well as to find out what your specific rights and responsibilities are. Once you notify the other partners, give them a chance to brush up on the contract as well so you're all on the same page.
Notify the Other Partners Individually
While you will most likely need to disseminate the news of your departure in a memo, letter, or email, it's best to first let the other partners know individually. This demonstrates respect for your professional and perhaps personal connections, and will help prevent your partners from feeling as though they're being blindsided. Be prepared for a range of initial reactions, from surprise and anger to understanding and goodwill, depending on the person and the circumstances of your exit from the company.
Hire a Commercial Litigation Attorney
A business attorney will be a valuable asset during this time of transition. They will help interpret any contracts and make sure they are followed correctly. They will also represent your interests, ensuring that you receive your fair share of business assets (perhaps in the form of a buy-out) and that all legal and financial obligations are wrapped up neatly, efficiently, and legally.
If things between you and your partners do not end on good terms, your lawyer will also represent you in court, making a difficult situation easier and less personal.
For more information on contacting a commercial litigation attorney, check out a site like http://wfactorlaw.com.
Come to an Agreement Regarding Assets
With the help of your attorney and your partnership agreement, it's critical to come to an agreement about the division of assets before you finalize your departure from the company. Ideally, you and the other partners will all be on the same page. Typical agreements include receiving income from the company over a period of years after you leave (similar to a pension), or a buyout that provides you with the full value of your stake in the company upfront.
Help Source Your Replacement
Your contract may stipulate that you have to help find your replacement before you leave. Even if you're not required to do so, however, it's still a classy and helpful way to leave the company. By helping to source a new, highly qualified partner, you will eliminate a lot of potential stress for the other partners.
You will also have the peace of mind of knowing that you are leaving your business in good hands, helping to protect your good name and legacy. This also helps avoid the feeling of "burning bridges" as you end your business partnership.
By following these tips, you can end your business partnership in a low-stress, dignified manner.
