You and your business partner started your company with the goal of working together for decades. This company has always been your dream, and you and your business partner finally made it happen.
Unfortunately, your partner doesn’t share your enthusiasm for staying at the business long term. They want to leave, and now you are wondering what comes next. Can they leave whenever they want? What steps do they need to take? What are your rights and obligations?
Your partnership agreement
Ideally, you and your partner can dissolve the business according to the terms of the partnership agreement. This could mean that you have to shut it down entirely and split up the assets if that’s what you agreed to do in the partnership documentation. But it may also mean that you just have to buy your former partner’s ownership share on the way out.
When things get really complicated is if you did not create a partnership agreement. You just started the business with a handshake deal. Maybe it grew from a side project into something much larger, but you never updated your paperwork or signed any official contracts.
This oversight could lead to serious disputes. For instance, maybe your partner wants to leave and owns half of the company. They want their money, but you don’t have the capital to buy 50% of the business. What happens next? Do you have to sell the business to a third party just because your partner wants to leave?
If you find yourself in this position, it helps to have experienced legal guidance as you explore your options.