How to finish a business partnership in a friendly way
Though most business partnerships start with enthusiasm and high hopes, sometimes the results don’t match one’s expectations. In certain cases, it is good to know when to say goodbye, dissolve a partnership and joint a business arrangement in order to preserve one’s finances and secure future opportunities.
How to Dissolve a Business Partnership
Dissolving a business partnership can be tricky, especially if both parties are not in agreement. Finding the right exit strategy requires meditation and well-defined parameters. A well-thought out dissolution agreement will consider timetables, tax liabilities, ownership transfer arrangements, and division of financial assets. Firstly, partners must agree upon what their business is worth and evaluate current and potentially future cash flows, as well as be current on all debts and outstanding loans, to effectively dissolve a partnership.
Information for Dissolving a Business Partnership
Making sure all business partnership information is available is crucial to ensuring a smooth transition. Having past financial statements, tax returns, asset appraisals, inventory lists, and lease or franchise agreement documentation on hand will ensure all the specifics are covered and holdings or investments are adequately protected. Associates who wish to dissolve a partnership should be well aware of their financial obligations as well as their legal responsibilities and be prepared to file a business partnership dissolution notice with legal authorities. Given the fact that legal representation in these matters can be expensive, be sure that the company’s current assets can cover all expenses to avoid having to pay out of pocket.
Addressing the fact that a business partnership has not worked out can be difficult but is necessary to avoid sinking with the ship. Parties should be forthright in their demands as well as realistic with their expectations for the dissolution of a business arrangement. When in doubt, seek informed legal counsel to ensure all matters are handled correctly and to the satisfaction of both parties.