What to Know About Separating from Your Business Partner

  • Posted on: Sep 15 2021
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There is no doubt that owning and operating a small business can be extremely challenging. This is especially true when you share ownership and/or operations with a partner. Many people choose to go into business with a close friend or family member since trust is already there. But unfortunately, it can make ending your business partnership much more complicated.

Why Do People Decide to Sever Business Partnerships?

There are many reasons as to why someone wants to get out of their business partnership, such as:

  • They disagree over how their partner spends money;
  • They believe that their partner poorly manages the company’s daily activities;
  • Their views on the future of the business greatly differ; and
  • They believe that they are pulling the majority of weight without the appropriate compensation.

How Might You End the Partnership?

The best thing that you can do is to have a legal agreement signed when you enter into the business in the first place. This agreement would outline how you must end the partnership. But if you and your partner failed to create such an agreement, there are still other options for ending a partnership. 

You could offer to buy your partner’s share of the business, or you can sell your share of the business to your partner. However, in either of these scenarios, it’s imperative that you research enough to know what the fair worth of these shares would be. 

Finally, if you and your partner can’t agree upon how to end the partnership, you may be able to do so by filing a lawsuit. However, this can cost a lot of time and money and is generally not ideal unless your partner has engaged in illegal activities. Such illegal activities may include:

  • Theft
  • Fraud
  • Misuse of intellectual property
  • Breach of fiduciary duty

If your partner has committed any of these crimes, you may have a good case, but it would still be in your best interest to consult with a qualified Virginia Business Law attorney.

The Law Offices of Brian L. Fox, APLC Help those in Virginia with their Business Succession Planning Needs

Whether entering into a new business or trying to get out of an existing partnership, it’s important that you understand your rights and to what you are entitled. That’s why it’s helpful to consult with a knowledgeable and experienced Virginia Business Law Attorney.

At the Law Offices of Brian L. Fox, APLC, we will help you to uphold your legal rights. To learn more or to schedule a free consultation, contact us today!

Posted in: Business Law, Business Planning