Tips for Breaking up With a Business Partner
Starting a company can be one of the most thrilling times in a person’s life. People spend years, if not decades, developing their ideas and planning to establish a business. Many new business owners select to have a business partner, which usually comes with several advantages, but can also lead to disagreements. So, you should be aware of the business laws in Arizona in terms of partnerships before anything goes wrong with the partnership to protect yourself and your assets. If an issue between you and your partner cannot be resolved, then it might be time to consult with an Arizona business attorney for help.
What is a Business Breakup in The Eyes of The Law?
Many reasons exist for a business relationship’s deterioration, whether due to financial difficulties or personality clashes that can’t be resolved without dissolving the company or partnership.
If you are having ongoing problems with your business partner, you may want to consider dissolving the company. A “business break up” is when business partners stop working together. If you separate from your partner, it could result in your business being dissolved, but this might not always happen depending on other factors.
Reasons to Dissolve a Business Partnership
There are many reasons why a business partnership may need to dissolve, including:
- Partners agree to split the partnership
- The business files for bankruptcy protection
- Death or illness of one of the partners in the business.
- Criminal investigation
- Mental illness
What Does a Business Breakup Entail?
All business breakups are different, so exactly what they entail will depend on the specific facts. However, business breakups typically involve:
- A review of the partnership agreements,
- A determination of the kind of assets and liabilities the business has acquired and accrued
- Developing a strategy to split the partnership up in a way that satisfies both partners.
Separating from your partner will include looking through tax and accounting records and other analytical steps that most business owners outsource to third parties.
How Do I Separate from My Business Partner?
The first step to a business breakup usually involves looking at the partnership agreement signed before the business was created. Whenever two people are doing business together, it is imperative to have a partnership agreement to deal with potential if there are problems down the line. Most partnership agreements have critical information, such as who has the authority to make certain decisions, how losses and profits are allocated, the management structure, and much more.
Notably, many partnership agreements have terms in the document relating to what happens if a partner wishes to exit the business, becomes incapacitated, disabled, or dies. Once you have decided to sever the partnership, the next step is to contact an experienced business attorney.
While you can always try to agree with your partner on your own, hiring a professional to assist you is still beneficial. While it might cost you some money upfront, it will save you money and headache down the road. An experienced business attorney can ensure that documents are handled correctly and that all aspects of the business breakup are legal and valid.
When Do I Need to Hire a Business Breakup Attorney?
Running a business can be incredibly stressful. It is not uncommon for there to be disagreements among partners. When this occurs, it is always best to work it out amicably. Unfortunately, that is not always possible. If you disagree with a business partner, specifically on how the business should be terminated, it is a good idea to consult with an experienced lawyer as soon as possible.
It is also a good idea to hire a business attorney if only one partner is leaving the business while the other wishes to stay and continue to run the business. A seasoned business separation lawyer can determine what the exiting partner is entitled to and help figure out how the other partner can continue running the business effectively.
What Does a Business Separation Attorney Do?
Business separation attorneys handle all issues related to dissolving a business or separating from a business partner. Specifically, most business separation lawyers can assist you in the following ways:
- Develop a timeline to end the partnership in the most economical way strategically
- Handle reorganizations and buyouts (when necessary)
- Mediate between business partners to see if an agreement can be reached amicably
- Take steps to finalize the dissolution of a partnership or a business, including completing current contracts and assignments, paying off debts, filing tax returns, selling assets, and contacting suppliers and customers.
Additionally, a business separation attorney can help in several ways before handling a business breakup. One of the first things they can do is help you determine your goals. Do you wish to buy out your partner? Or do you want the entire business to dissolve? It is challenging to achieve your goals if you are unsure what your wants and needs are.
Arizona’s Premier Business Break Up Attorney
While business partnerships can be mutually beneficial, they are often complicated. A business partner’s vision for the future may change as a business grows; sometimes, a partnership is not meant to last forever. If you are considering hiring an attorney to help you through a business breakup, Anthony Law Group is here to help. Our experienced attorneys know how to handle business disputes and will do everything in our power to ensure a positive outcome for you and your future business prospects. If you have any questions about business breakup laws in Arizona or are seeking a business litigation lawyer in Arizona, look no further than the Anthony Law Group. Contact us today to schedule a consultation.