Years ago, you and your business partner may have had a positive working relationship. Whether you were classmates who shared a vision at the time or were childhood friends destined to change the world together, conflict is still possible. Now, you may be of the realization that you no longer agree on the direction in which you want to take your business.
As in any relationship, you may have grown apart without ill will. Unfortunately, in some circumstances, business partnerships end in expensive court battles, with each person trying to get something from the other. However, there are proactive steps you can take to minimize disputes while you dissolve your partnership.
Three considerations for dissolving your business partnership
Regardless of why you wish to proceed without your business partner, honest communication is key. If discussing your concerns does not resolve them, you and your partner should:
- Follow the dissolution protocol established in your partnership agreement. Hurt feelings and resentment may surface. However, adhering to your contracted plans will likely reduce potential conflict that could arise throughout the process.
- Close your joint accounts. If the two of you share financial accounts or owe creditors, be sure to pay your debts and distribute your assets according to the terms of your partnership agreement.
- File appropriate paperwork to end shared liability. Be especially careful to complete the necessary steps of dissolution if the business plans to continue under its current name.
You and your partner may not see eye-to-eye on every decision you make as you sever your professional relationship. However, if you invested in specifying the terms of your partnership when you started your business together, you should be able to minimize your potential for disputes when you go your separate ways.