If you have decided to stop working with a business partner so you can both continue with your separate ventures, there are a lot of things you need to sort out. In the course of going into business with someone, various agreements will have been made and legal documents signed. If you cannot agree on how to end these agreements, you may have no other option but to go to court. However, this can be costly and time-consuming so it is better for everyone if you can settle your affairs amicably. Below is a guide to 3 things you should do to get the best possible outcome:
Discuss any contractual obligations
The first thing you need to do is to sit down with your business partner so you can discuss any contractual obligations you have to each other. You also need to establish any outstanding obligations that your company has to other clients or organisations. Once you have established the level of obligation that you have to each other, you can begin negotiations on how these will be dealt with.
Negotiate with your partner
It is important to understand that even though you have decided to make a break from your business partner, this doesn't have to result in bitter recriminations. Your commercial lawyer will be able to help to represent you during negotiations and will be able to offer advice about the best way forward. For example, if your partner wishes to continue in business, they may be willing to buy you out, so they have complete control of the business. If you have contractual obligations to your partner that you do not wish to honour, you may offer your business partner a lower price on the condition that you are released from the obligations.
Prepare an exit strategy
Before you commence negotiations with your business partner, you should ensure that you have a clear exit strategy in place. A clear exit strategy will allow you to act in a bold but transparent manner and will help to avoid any confusions or misunderstandings. The reason negotiations often break down, and business partners find themselves fighting in court is often down to the suspicion that one party is trying to trick the other. A commercial lawyer will be able to help you draw up a legal document which underpins any exit strategy you propose so that you can present this to your partner.
If you would like further advice, you should contact a commercial lawyer today.
Share4 August 2017
When you are a small company it can be a little scary to enter into business relationships with much larger companies. Larger companies have a lot more resources to protect themselves if there is a dispute. That's why it's important to have a smart lawyer on your side to help you draft the most watertight agreements possible. This blog has some tips that I have picked up over the years on how to make sure that you are legally protected when dealing with big companies, as well as some tips on how to choose a great business lawyer for your business.