There are many reasons why business partners may wish to part ways, whether it be for financial reasons or personality differences which cannot be worked through, most of the time the last thing anyone wants is to dissolve the business or the partnership.
If you are experiencing difficulties with your business partner, then it might be time to part ways and end your relationship. A “business breakup” typically refers to a severance of the relationship between co-owners. While separating can result in your business being dissolved, no one typically wants to kill the goose that lays the golden eggs. There are a lot of options and strategies that don’t include dissolving the company. Lawyers who specialize in business breakup cases know these options and strategies, others don’t.
All business breakups are different, so exactly what they entail depends on the facts at hand. However, business breakups typically involve:
Separating will include looking through tax and accounting records and other analytical steps to determine the best path.
The first step to a business breakup usually includes looking at the agreements signed when the business was created. Whenever two people are doing business together, it is imperative to have an agreement outlining how disagreements will be dealt with in the future. If these agreements do not exist, the state imposes a set of rules dealing with disagreements. But most corporations do have founding documentation, and those agreements have critical information in them, such as who has the authority to make certain decisions, how losses and profits are allocated, management structure, and much more.
Notably, many corporate agreements have terms relating to what happens if an owner wishes to exit the business, becomes incapacitated, becomes disabled, or dies. Once you have decided to sever the relationship, the next step is to contact an experienced attorney.
While you can always try to come to an agreement with your partner on your own, it is still beneficial to hire a professional to assist you. While it might cost you money upfront, it will save you money and headaches in the long run. An experienced business attorney can save you money and ensure that you are not getting taken advantage of, and that all aspects of the business breakup are legal and valid.
Running a business can be incredibly stressful. It is not uncommon for there to be disagreements among owners. When this occurs, it is always best to try to work it out. Unfortunately, that is not always possible. If you disagree with a business partner, the problem affects the core functions of the business, and you cannot seem to resolve the issue on your own, it is a good idea to consult with an experienced lawyer as soon as you can. A lawyer familiar with business breakup cases will be able to assist you in coming to an agreement with your partner.
It is also a good idea to hire a business attorney if a partner is leaving the business, while the other wishes to stay and continue to run the business. A seasoned business lawyer can assist in determining a fair exit strategy for those leaving and for those staying to maintain operations.
Business separation attorneys handle all types of issues related to dissolving a business or separating from a business partner. Specifically, most business separation lawyers can assist you in the following ways:
Additionally, a business separation attorney can help in several ways before handling the business breakup. One of the first things they can do is outline all of your options for you. It’s difficult to determine your goals if you are unsure of your options. You also need to know your rights and responsibilities as an owner.
While business arrangements can be mutually beneficial, they are often complicated because they evolve naturally over time. A business partner’s vision for the future may change as a business grows, and sometimes, a relationship just is not meant to last forever. If you are considering hiring an attorney to help you through a business breakup, Shinners & Cook is here to help. Our experienced business attorneys know how to handle business disputes and will do everything in our power to ensure a positive outcome for you and your future business prospects. If you have questions about business breakup laws in Michigan or are seeking a business litigation lawyer, contact Shinners & Cook Law Firm, today.