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  3.  » Help! I need to dissolve my business partnership

Help! I need to dissolve my business partnership

| Dec 23, 2020 | Business Law |

Ten years ago when you and your brother-in-law decided to open up a business together, you never dreamed the day would come when you would have to dissolve the partnership.

But, things have changed. Your sister divorced him due to an escalating addiction to prescription pills and he continued spiraling down that rabbit hole. You can no longer trust him to uphold his end of the partnership duties.

Where do you go from here?

Ideally, your partnership agreement spells out just how the business partnership is to be dissolved. But far too often, especially in family situations, the partnership agreements skim over these matters.

That’s to your detriment, as you are now learning. So, what options are available?

Negotiate directly

If the two of you are still on speaking terms, you may be able to negotiate civilly with your partner about dissolving the partnership and devising an exit plan.

He may understand that you are doing what is necessary to salvage the business, which is your source of income. He may have a bottom line in mind that will allow him to walk away from the company with at least a few dollars in his pockets.

Before you begin your negotiations, however, consulting with your own business law attorney is always recommended so you can solidify your position.

Engage in mediation

If the situation has deteriorated too far for direct negotiations, a mediator might be the better option. Professional mediators are trained to keep the negotiations on-topic without devolving into unproductive side issues, e.g., his addiction and subsequent divorce from your sister.

Going to court

This is your nuclear option, so be very careful how and when you use it. Litigation is expensive for all concerned, and the business may not survive the process.

Deciding to sue your business partner effectively airs all your dirty laundry. Court filings are matters of public record, which means that anyone with the time and the inclination can read all about the dispute. That alone can be enough to discourage customers from doing business with your company.

Your business law attorney can advise you on the best course of action throughout the process of dissolving your business ties with your soon-to-be former partner.

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