It is unfortunate, but business partners do have fall-outs and when they do you want to be ready with the support and legal assistance you may require.
But what happens when one owner decides that it’s time to split and go separate ways? It could simply be that one partner is not as invested as the other, or maybe one just wants to retire.
Whatever the case is we have highlighted the key things to consider when splitting assets with your business partner in Ontario.
Have an Exit Strategy
It’s always best to have an exit strategy before you discuss how you plan on splitting the assets. Some options might include:
- Buying your partner out
- Sell your stake to your partner
- Sell your stake to another individual
- Merge with another business
Be sure you know what you want from the split before approaching your business partner and negotiating an agreement.
Discuss What the Business Will Look Like With One Partner Gone
If you’ll be moving on to another business or partnership, discuss it with your partner before you go. The reason being is that you want to be sure that you won’t run into any legal conflicts.
You also want to be as transparent as you reasonably can to avoid any conflict or misunderstanding.
Use a Business Lawyer aka Corporate Lawyer
A business is usually started with good intentions. If the intention is for the business to be successful then you should not be afraid to engage a corporate lawyer early in the process. It is not only a wise decision but a crucial one. This way, if a partner wants to leave the business when it is flourishing you have something in place to determine what that split would look like. The short-term cost at start-up is much less than prolonged litigation years later.
There is a lot of paperwork involved with dismantling a business and splitting assets from partners or shareholders, so to ensure that nothing is overlooked it is important to use a business lawyer.
Leave It Amicably
As the saying goes, you never want to burn any bridges when leaving a job; the same goes for stepping away from a business.
Thank your business partner for everything they brought to the business and your relationship.
Keep everything as amicable as possible. If you are fair and reasonable, your business partner is likely to respond the same way.
Conclusion
As mentioned above, leaving a business and splitting assets is a lot more complicated than you may think.
To avoid any unwanted paperwork and headaches, feel free to call our office today to book a free 30-minute consultation.
This blog is made available by the law firm publisher, Epstein & Associates, for educational purposes. It provides general information and a general understanding of the law but does not provide specific legal advice. Any specific questions about your legal concerns please contact us now and speak to an expert today.