Running a business is kind of like going to college for business partners. Although they don’t share a dorm room (well, they might), they do spend a ridiculous amount of time together, which is the perfect breeding ground for irritation and dissent. If your business partner is driving you crazy, and you’ve decided the problems can’t be rectified, you might have limited legal options to correct this terrible situation.
It’s Not A Perfect World:
When you and your business partner first got together with your Great Idea, you probably thought everything would be sunshine and roses from then on out. You pictured getting together for family barbecues together, sharing tales of success from the corporate world and congratulating each other on a job well done. What you didn’t imagine were the stressful days of pouring over numbers, the long meetings with prospective investors, and the increasingly irritating twang of one another’s voices. Hey, it’s not a perfect world.
If your business partner is driving you crazy, you’ll want to know first and foremost about your legal options. You might be losing a good friend in the deal, and your wife might make you sleep on the couch for a month (she’s best friends with his wife, but if you cover your legal ground, your partner can’t take you to the proverbial cleaners. This means going over every aspect of your business with a fine-toothed comb.
Your Business Partner:
In the perfect world mentioned above, you and your business partner would have drafted a partnership agreement before the business was ever formed. In that agreement, you would have outlined what exactly happens if one of you ever wants out, and how the business will be liquidated. You might also have stipulated in that agreement how one party can keep the business going if the other is no longer interested. But you didn’t, did you?
A Joint Partnership For A Small Business:
In the absence of a partnership agreement, your legal options are fairly slim, but your business partner is driving you crazy, and you definitely want out. So, your next step is to hire a lawyer to help you figure out what parts of the business are yours, and which are your partner’s. This is easier to do in a joint partnership for a small business because the profits, losses and inventory are split down the middle. For a corporation, however, it gets trickier.
When your business partner is driving you crazy, your choices basically narrow to two: either you buy out his share of the business, or he buyers out yours. These are the terms of the “corporate divorce”, and they can have negative financial implications for both parties. If you sell your end of the business, you forgo any future profits it makes, and you might get swindled if you don’t have a competent attorney. On the other hand, if you buy him out and the business tanks six months down the road, the financial burden is yours to bear alone.
Understand The Implications Of Your Decision:
In short, if your business partner is driving you crazy, you’ll need an experienced attorney to help you explore your legal options. Don’t do anything rash until you understand the implications of your decision, and don’t let him know what’s on your mind until you’re sure you’re standing on firm, solid ground.