People get into business partnerships for a variety of reasons. But like everything else in life, business partnerships come to an end at some point. When one or more partners decide to vacate a partnership, the exit can be contentious or amicable. However, dissolving a business partnership on good terms is usually preferable.
A smooth separation can go a long way in preventing costly conflicts and legal tussles. So how do you part ways amicably?
Dissolving the partnership
No matter how you end the partnership, you need to get it right. With that said, here are important considerations you need to keep in mind when exiting a business partnership.
Come up with a comprehensive exit plan
The key to a smooth exit from a business partnership lies in your exit plan. A sound exit plan should include reviewing the partnership agreement to be sure that you not violating the provisions of the dissolution clause. Most partnership agreements come with a clause that governs how the process is to take place. If your partnership agreement has a dissolution clause, you will need to follow the steps outlined therein. If there is no partnership agreement, however, then you need to refer to Texas Partnership Code.
Discuss the decision to leave with your partner
You’ve done business with your partner for years. It’s only prudent that you have a candid discussion with them when leaving the partnership. During this discussion, be sure to bring up each party’s obligations, like the current and future liabilities as well as how you will handle them. While at it, talk about how you will share the business’ assets.
Dissolving a business partnership can be tricky. Find out how to safeguard your rights and interests while dissolving a business partnership.