When two or more people start a business together, it’s a partnership. But what happens when that partnership becomes less-than-ideal? Here are the best ways to start dissolving a business partnership before things get too messy.
What is a business partnership and what are the benefits of forming one?
When two or more people start a business together, they form a business partnership. This type of partnership has many benefits, including:
Increased capital: When two or more people invest in a business, the capital available to the business increases, which can lead to more opportunities for growth
Shared workload: When two or more people are working on a business together, the workload is divided among them, which can lead to less stress and a better work/life balance.
Shared skills and knowledge: When two or more people are working on a business together, they can share their skills and knowledge with each other, which can help the business grow.
What are the signs that a business partnership is no longer working well for everyone involved?
There are many signs that a business partnership is no longer working out for everyone involved. Some of the most common signs are:
One or more partners feeling overwhelmed or stressed: When one or more partners feel overwhelmed or stressed out by the partnership, it’s a sign that things are not going well.
One or more partners not pulling their weight: When one or more partners aren’t doing their share of the work, it’s a sign that the partnership is not working.
One or more partners arguing or fighting constantly: When partners are always arguing or fighting, it’s a sign that the partnership is not working.
What are some of the reasons why partnerships break down?
It’s unreasonable to expect any successful partnership to last indefinitely. Each individual is different, so partners will inevitably have different opinions on how the business should be conducted. Partnerships are successful because each person brings something different to the table, and there are various ways partners can leave a business while maintaining its success–and without destroying themselves in the process.
Not every disagreement between partners is life-threatening. However, when serious disagreements arise between two people who founded their company together, that sets off red flags for anyone invested in them or their product.
It’s even more difficult when the business partners are intimate partners. In such cases, it’s important to have a clear understanding of what will happen if the business partnership falls apart. Both parties need to be prepared for the possibility that things might not work out, and they should have a plan in place for how to separate their personal and professional lives. Hiring a divorce lawyer is important so that all the legalities are met, especially when valuable assets- or even children, are involved.
How can you start dissolving a business partnership in a way that is fair to all parties involved?
There are many ways to start dissolving a business partnership in a way that is fair to all parties involved. Some of the most common ways are:
Negotiating a settlement: One way to dissolve a business partnership is to negotiate a settlement between the partners. This involves discussing the disagreements and coming up with a solution that everyone can agree on.
Mediation: If the partners cannot come to a settlement on their own, they can mediate with the help of a mediator. A mediator is someone who helps the partners come to an agreement by providing impartial advice.
Arbitration: Arbitration is similar to mediation, but it involves using a third party to help resolve the disagreement. The third-party, or arbitrator, will listen to the arguments from both parties and then provide a solution. Both parties must agree to accept the ruling of the arbitrator.
Dissolution by court order: Another way that a partnership can end is if one partner sues another partner in court and the judge rules that the partnership should end. However, this method can be expensive and time-consuming, as well as embarrassing for those involved.