The future looked rosy when you decided to start a business with your partner. Perhaps you were married to one another at the time, or were in-laws, good friends or co-workers itching to hang out your own shingle.
But over time, your business partnership took a few dings as your personal relationship with your partner deteriorated. Maybe some unfortunate events unfolded that revealed the true nature of your partner’s character or perhaps they just failed to fulfill their obligations to the business. Either way, you decide that a major change is needed.
Ditching a business partner requires finesse — and legal strategy
When you first drew up your business partnership agreement, you set the terms that must now be followed if you plan to disintegrate it. A good place to start when looking for an exit strategy is your San Diego business law attorney. The two of you can review the partnership documents and determine the grounds you can use to dissolve your partnership.
If it is a relative or close friend with whom you’re in business, your business problems might be part of a greater issue of trust breaking down. It’s important that you keep your focus solely on the breaches in your partnership.
When your partner didn’t fulfill their duties
When there are no personal conflicts between the partners, the situation is different but still challenging. After all, despite a lack of work ethic or other major flaw, your partner may still be a nice person.
You will need to thoroughly document your case to invalidate the business partnership. For instance, if your agreement called for one partner (you) to provide the capital and the other (your partner) to add the “sweat equity” and your partner is instead slacking, document the instances where they failed to honor the partnership’s terms. If your case winds up challenged in court, this information could be invaluable.
When outside events intervene
Perhaps the hardest of all situations is where your partner has done nothing intentionally to weaken your agreement but has still fallen short of the mark. This can happen if your partner or their family member is suddenly felled by a serious illness or other unexpected tragedy.
You hate to add to the problem but if your business partnership is compromised by the event, you must remain practical. A frank and honest discussion of the situation may be all that is needed for you and your partner to dissolve the agreement.
Failing that, you may need to take legal action to protect your business and extract yourself from the nonproductive partnership.