How to end a business partnership

| Aug 22, 2020 | Business Law

In some ways, ending a business relationship is a lot like ending a marriage. For instance, you could save yourself a lot of money by putting a partnership agreement in writing. The agreement may specify how to dissolve the partnership and what happens to the company after the relationship comes to an end. In some cases, you and your partner may decide to sell the company to buyers in Pennsylvania or another state.

An buyout may need to take place

If you are planning on leaving the business, you may be able to negotiate the sale of your ownership stake to the remaining partner. In the event that your partner wants to leave the business, it may be possible to buy that person’s stake in the company. The other person’s share of the company may need to be purchased even if the company is going to be sold to another person or entity.

What to consider when dissolving a business

Ideally, there will be a timeline as to when the company will be dissolved or sold to another party. Prior to closing the doors for good, it may be necessary to file a tax return and other documents. It is also a good idea to determine how attorney and other fees will be paid during the closing process.

Let others know about upcoming changes

It is important that shareholders, vendors and employees are made aware of the fact that the company is likely going to close or come under new ownership. Existing customers should also be made aware of any changes related to how the company is operated. Doing so can help to maintain goodwill that has been accrued over the life of the organization.

If you are involved in a dispute with a business partner, an attorney may help you resolve it. In some cases, it may be possible to resolve the matter without going to court, especially if you and your partner have a written agreement.

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