DOWNLOAD OUR FREE GUIDE: How to Get Rid of a Parasite Business Partner
Are you a business owner who has a partner, and you need to get rid of your partner?
If you contemplate getting rid of a business partner, you may find yourself in a dark place, thinking dark thoughts. Common feelings are disillusionment with the current situation and betrayal.
You’re angry at your business partner, maybe even mad at yourself, and you’re confused because you’ve got a model of a business, and you’ve got to figure out how to extricate yourself without giving up time, sweat, blood, and tears that you’ve poured into the business.
Three Routes To Get Rid Of A Business Partner
- Buy Them Out Of The Business
- Sell Your Interest In The Business
- Just Walk Away
Buy Them Out Of The Business
The thing to keep in mind about this is you can only buy your business partner out if you agree. So, if you were smart and had your act together way back, you prepared an agreement that anticipated this day, and you have a formula in place, and it’s pretty straightforward. But, if you’re like a lot of people, you don’t have that agreement in place with your partner; you’re going to have to, in an unfavorable or difficult situation, you’re going to have to have a heart to heart talk with your partner and decide on terms to buy your partner out.
The other thing to think about when buying a partner out is that you need to make sure that your partner will not continue competing against you when you do.
Selling Your Interest In The Business
Your second option to getting rid of your business partner is to sell your interest in the business. You can sell to either your partner or to a third party.
Now, in terms of things to think about when selling your share of the business, here are two:
- Your business partner may be the only buyer.
- Business liabilities can follow you if not handled correctly.
Just Walk Away
The third way to get rid of your business partner is to walk away. If you’ve watched the movie Napoleon Dynamite, you meet an individual named Rex, who runs a dojo and teaches his students how to break their wrists to walk away. That could be you.
It may make sense to get your freedom to walk away from the operation. Now to do that, first things first. You’ve got to make sure that when you walk away, you’re leaving the liabilities behind. If you take the liabilities with you, you haven’t walked away. What we said about selling your business interest also applies to walking away. Also, if you walk away, there’s going to be a ton of work and analysis to figure out what you can take with you.
Sometimes a business’s most important assets are intellectual property, things in your head or in your computers, such as customer lists, your method of operation, vendors, the way you do business, and your business plans. You’re going to need to sit down with an attorney to make sure what you can take with you and what you can’t.
You need to make sure whether you have a non-compete agreement or any agreement that precludes you from continuing with a similar or the same business on your own. Also, you’re going to have a lot of work to do to sort out whose stuff is whose. All of these decisions depend on whether you’re walking away from a corporation, an LLC, or a proprietorship. Regardless, it would be best to determine whose equipment belongs to who and whose money belongs to who. Again, there will be a lot to sort through in the process of just walking away.
Then an additional consideration to think about when walking away is how do you mechanically walk away? What steps do you need to take to formally tell your world and tell your partner that you’re not an officer or director of such a corporation?
How do you physically separate yourself? Those are all things that you’ll want to talk with an experienced business attorney about so that you make a clean break.
If you want to get rid of a business partner, we invite you to have a conversation with us about why you want to do that, what you hope to accomplish, and how best to achieve what you want to do.
DOWLOAD OUR FREE GUIDE: How to Get Rid of a Parasite Business Partner