The End …. of Your Business Partnership
Breaking up is hard to do. Like marriages, business relationships sometimes break up. When ending a business relationship there are several questions you will need to answer:
1. What type of business is it? How is it formed with the Oklahoma Secretary of State? Or, is it a a partnership? Limited or General?
ex: Limited Liability Company (LLC); C Corporation; Sub Chapter S Corporation; Partnership; Limited Partnership, Etc.
2. Do you have a written agreement or formation document?
-If YES: Review that agreement with an attorney and make a plan for how to proceed.
-If NO: There may be default statutes in place that effect your type of business organization on how to handle a break up.
3. Do all parties agree with the accounting, and is it up to date?
-If NO: A plan to do this is required.
4. Is your business breakup amicable?
-If YES: You and your partner could develop a Separation Agreement and work to divide up all assets and debts. An attorney should draft the paperwork.
-If NO: If the partners are arguing about whether or not the accounting is correct, an audit may be required. If there are issues with the division of assets and debts, an attorney should be hired to research your case and create a plan to dissolve your business.
Remember, breaking up is hard to do. Before starting a business with someone else, discuss with an attorney how you will want to wind up your business affairs if things do not workout.
Breaking up is hard to do because of emotional aspects involved. However, if you can separate your feelings and focus on a fair division of the debts and assets or purchase price, things may proceed better than the alternative. If your partner has been dishonest or fraudulent in his business with you, litigation may be required.