Ideally, if your business partner wants to leave the company, you will be able to find an easy way for them to do so. Maybe they’ll help you find a replacement, for example, or maybe they’ll agree to take a background role and not leave entirely. It all depends on the specific situation.
But it’s important to know that this doesn’t always go well and potential complications can arise. This is why it’s so important to have an exit clause in your partnership agreement. This dissolution clause can help you determine the next steps that you need to take.
Mediation versus court
One example is that you may be worried that your partner will take you to court to try to make you sell the business. This can sometimes happen when they want out and they also want the value of their half of the business, but the remaining business partner doesn’t have the financial resources to buy it – or is not interested in doing so at the time.
But you may want to avoid going to court, seeking to keep the decision-making power in your own hands. The exit clause could state that you have to at least try mediation before going to court, so that you can work together to find a resolution.
What if you can’t afford it?
If you’re unable to purchase the other half of the business to buy out your partner and take over complete control, you may need to think outside of the box. For example, is there an investor or another business professional who may be willing to take over your partner’s role? If you don’t want to give up your own role as the founder of the company, you could also consider buying a small percentage of your partner’s share to give you more than 50% control, and then selling the rest to a third-party.
Of course, another option may simply be to take out a business loan. You could look at buying your partner’s half as an investment in the future of the company.
No matter what you decide to do, if it gets complicated and a dispute looks likely, be sure you understand your legal options.