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Will ending your business partnership be problematic?

Your business partner is making noises about moving on. If the relationship is going to end, you hope the breakup will be amicable. You are concerned, however, because you have a bare-bones partnership agreement that lacks a well-defined dissolution strategy.

You have several options in how to address the situation. Speaking to an attorney can help you decide which is the best choice.

Revising the partnership agreement

If you plan on continuing the business yourself, and your partner simply wants out, consider revising the terms of your partnership agreement. You can take on more of the responsibilities and assume more of the liabilities while your partner takes a minority share. This allows you to keep primary control of the company without having to go to the expense of purchasing all your partner's equity.

The buy-out option

If your partner wants nothing more to do with the business, he or she may push for a buy-out. Before you agree to this, explore other options. To help you address the buy-out idea, engage the services of a professional who can put a value on your business and work out a fair price. You will also be able to determine whether a buy-out will be a good investment in the long run.

The payment plan

If you and your partner are on friendly terms, you might broach the option of a payment plan in order to facilitate the buy-out. You could set it up so that your partner would collect a percentage of equity in the business in addition to the equity he or she already owns. Think of it as interest on a loan.

Achieving agreement

In the absence of a partnership dissolution strategy, ending a business relationship can become complicated and uncomfortably sticky, if not downright hostile. However, you can rely on legal assistance to ensure you and your partner negotiate a proper agreement, bringing an end result that is clean cut and beneficial for all parties. 

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