Starting a business with a partner can be the beginning of an exciting venture. Whether you and your partner came up with the idea together or your partner joined you down the road, your team likely gave your business the boost it needed to get started.
As time goes on, you and your partner are more likely to want to take different approaches to the business. Whether you have been in business together for months or years, it can be challenging to determine when you should end the partnership and how you should do it.
Here’s what you should consider if you are thinking about dissolving your business partnership.
Getting to the cause
There can be many reasons you want to end a business partnership. While you might be able to resolve some situations, it is better to go your separate ways in others.
Before you decide you need to end your partnership, it is essential to talk to your business partner about their perspective. In some cases, you and your partner might be able to find an alternative solution so you both can still benefit from the business.
Explore alternatives
As the company grows and changes, you and your partner may no longer want to have the same involvement in the business. In some cases, as your personal lives change, one of you may want to take a less prominent role in the company.
Adjusting your investment in the business is one way to change your partnership without dissolving the agreement. However, when you adjust your ownership percentages, it will also be essential to change your responsibilities to reflect your share of the profits.
When the end is near
In some cases, you know it is time for you and your partner to go your separate ways. Buying your partner’s share of the business is one way to keep the company while letting your partner move on to the next phase of their life.
When you decide that you will buy out your partner, it is essential to get your agreement in writing. While you may agree on the terms at the moment, some partners end up battling the terms of an oral agreement.