How to peaceably dissolve a business partnership

Business partnerships dissolve all the time.Sometimes a partnership simply doesn't share the same vision for the company any more.Many times through a partnership one member gains the confidence and experience needed to go off on his own and start his own business. Dissolving a partnership is not always a terrible thing.In fact there are many ways that a business partnership can be dissolved peaceably and both members of the partnership can be happy with the end result.

The biggest obstacle to overcome in a peaceful dissolution is the separation of assets.There are a number of things that can be considered assets of the partnership that cannot be split evenly.Or, many times when one partner believes that they deserve more than %50 of a given asset because of time and effort invested individually in that asset.Clearly if one of the partners wants to start his own spin-off business he would like to carry over the same clients that he had under the partnership.This can cause a problem if the other partner wanted to retain the clients for his own new business.Now you are presented with a new problem, instead of negotiating a fair split with a former partner, you are talking about your business' future with your new competitor.

Many people cannot overcome these obstacles and as a result the asset distribution of their partnership is left up to the court and a judge to decide.More often than not the court system will divide the business 50/50 and you may not end up getting the %50 that you wanted.

Positive aspects of dissolving a business partnership
There are definitely mutual benefits to dissolving a partnership.One is that there are legal protections provided for sole entity businesses (such as LLCs) that are not available to partners.Some partnerships will dissolve simply because of the risks associated with liability in a partnership.

When you are no longer a member of a partnership your debts and decisions are your own.Having two people acting as one is bound to stir up disagreements from one time or another simple because different people have different opinions.When business partners become tired of having to always consider and anticipate the actions for the other partner, dissolution is a relief and can often be dissolved peaceably if the working relationship was good.Once you have signed a dissolution notice and filed it with the state you have 90 days (approximately, amount of time will vary from state to state) in which to finish your affairs as a partnership and to continue making joint decisions.After this period of time there are no recognized partnership rights.

This is the time to work with your partner to fairly come to agreements regarding how to serve the best interest of both parties.Many times when it comes to deciding who will take the clients of the business, the partnership leaves it up to the clients themselves to choose which partner they would like to continue doing business with.It is only fair after all that the partner who has invested more in his relationship with the client should be able to retain that client's business.Sending notices to the individuals that the partnership did business in an effort to notify them of the split it also wise.

Another important aspect of dissolving a business partnership is to consider any contracts or leases that will become null and void if the partnership dissolves.Carefully review and re-negotiate if necessary the leases on office space, business licenses, tax statements, loan agreements, etc.Make sure to tie up loose ends to avoid any future problems.