How to split a business and go your separate ways

Most business partnerships are formed because alone partners do not believe that they can be successful business managers, but with combined efforts they believe that they can make money in the industry.Other individuals fear taking on all of the risks involved in starting and maintaining a new business.For others it is easy to go into business because you and your partner are good friends and you think that the experience will be both enjoyable and financially rewarding.However well intentioned a business partnership may begin, many partnerships end up dissolving.

Even the partnerships that may seem ideal at first may not be able to survive the tough business challenges ahead. Successful partnerships require continuous trust, respect, and belief in common goals.When these principles no longer exist or when one or both parties simply feel like it is time to start out on their own it is time to split the business.

Dissolving a partnership can be very complicated.After all, can you split ideas or concepts?Is there an impartial gage that can measure the effort of individual parties in the partnership?Before you decide to split your partnership because you think it will be easier that way consider how traumatic and painstaking the actual split can be.Carefully come to the decision (if possible after consulting with your partner) after considering all of the advantages and disadvantages of the arrangement.

How is ownership of the business divided?Most partnerships are established with the assumption that each of the two partners would be responsible for 50% of the business.Unfortunately this is never the case.Unless one of you can make decisions without consulting the other and still remain in perfect harmony (not likely).What is more often the case is that one member of the partnership is more dominant.If you are the more passive member you are probably very happy with how the business is running and do not want to see it dissolved.If you are the partner that has been taking the initiative and keeping the company alive, it is likely that you want to get rid of your partner and just run the business yourself.Do you see how very differing views can make coming to an agreement very difficult?

Fortunately, this situation isn't entirely hopeless.You do have a dissolution process that you can go through.If the decision is mutual you and your partner can negotiate and decide who is going to take what.If one partner wants to dissolve and the other doesn't you have a few options.Most partnerships enter into an agreement at the onset of the partnership.This agreement can outline exactly what should occur should there be dissolution of the partnership.Ideally you and your partner will have set down with an attorney and decided on how you will split assets ahead of time.

If you were not fortunate enough to have had the foresight to enter into a legal agreement you can always take your case before the court.A judge will most likely resolve the dispute by splitting the assets 50/50.Sometimes this process ends up working well for one or both parties.Most often there is still dissatisfaction as there is no way to request certain assets once your business is in the hands of the court system.

Rather than jumping into splitting a partnership that is not working, it is wise to try to mend whatever harsh feelings or opinions you have of your partner.If your problems are not something you can work out (through better communication, being honest and open, etc.) then you have a long hard road ahead of you.