How To Get Out of A Bad Business Partnership
84Divorce Business Style
A business partnership, like a marriage, comes with emotional and legal considerations that should really be thought out in advance. However, business owners, like newlyweds, are often blinded by the bright glow of hopes and dreams. No one likes to think "worst case" or if they do they are often referred to as "the negative one." In this age of "The Secret" and all that positive thinking implies, it is especially important that objective thinking be applied to any relationship you enter into on a legal basis.
In business, the 50-50 partnership, obligates you to either buy out a partner or dissolve your business if things aren't working out. When I say, "not working out", this does not only refer to things beyond ones control. It also refers to a partner who is consciously ripping the business off or conducting themselves in an inappropriate or destructive manner. It doesn't matter. Your partner could be robbing you blind and you would still either have to buy them out or dissolve the business. In both cases, it will cost you alot of money in legal fees and in lost productivity.
Having been through a series of partner dissolutions, my advice to small business owners is as follows:
- If you can do it without a partner, I highly recommend you fly solo. You can always hire people that perform the functions you need to add to your special skills.
- If you really want to work with a partner, do alot of research on the person before you go into a legal partnership. Know who you are dealing with. Interview them. Interview people that have worked with them.
- If you can own a majority stake instead of 50-50, do that.
- If you enter into a relationship and know that it has gone bad, deal with it quickly. Don't drag these things on. Your business and your mental health (maybe even physical health) will suffer.
- Get a good lawyer. This is not the time to penny pinch.
- Work from a place of forward thinking. Rehashing the past or having an internal debate about who did what, or who is right and who is wrong, is a waste of your time and energy. You can't turn back the clock. You can learn from the past if you let the anger go.
- Splitting with a business partner is not always just business. It can get personal. Be easy on yourself. You'll need time to recover from the process in one way or another.
- Don't rush into any new partnerships or make rash decisions. It's not the time to jump into anything too quickly.
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Way to go Keith! Things wil just keep getting better. Enjoy the beer and the freedom!
I feel like I`m splitting up with a girl friend....My partner is irrational I offered him great deal to him buy out he said no it was not fair.....I then reversed the offer with him buying me out for the same price.....he was offended saying he was being ripped off......I can`T WIN any suggestions
Get a lawyer if you don't have one already. Sadly, you may need to close down the business or at least make it clear that you are ready to do so. He may realize that getting some money will be better than getting no money. Of course, I don't know your situation and your business reality. I could not have done it without a lawyer who was very sympathetic and a great listener.
Thanks for the article, Rochelle, it is amazing how it helps to see things from a different angle!. I have always been flying solo and think will get back on track.
It is always a fond of inspiration to find people like you!
All the best
WD
I just wanted to vent my situation,any advice will really help...I put all the money in to start this business.my partner/friend has payed me back since we have been succesful in our venture..it has been two years now and her son just started working with us. MY son has worked with us fo over a year and makes the same amount of money since he started, my partner has been paying her son more because she is in charge of the finance part of the business. I feel stupid for not looking sooner but I felt I COULD TRUST her she is my friend of 10 years. now I am so stressed out about this. she said she was reimbursing him for something, I feel i should know what is going on with my money ..when i do confront her she gets into a defense mode and accuse me of doing things and hiding things from her..I need to dissolve this partnership but not sure where to begin.. the contract has both our names on it ..but her integrity is an issue to me..isnt this a breach of that contract? in my eyes it is..any advice anybody can give me would be appreciated..MD
My husband was also my business partner for 15 years. Don't EVER do that! In our case, he was allergic to detail, so I ended up with the administrative "cleanup" so to speak while he was on the phone talking to clients, traveling and being the "big cheese." Next came employees who despite the fact that I was working my butt off - and often working at home late at night, resented me as "the wife." They had this notion that I sort of hung out at the office until the kids got out of school and they made things very difficult. But because they were young and male, my husband wanted them to look up to him, so he tended to identify with them. I think that this type thing happens to a lot of wives who end up in anything "Mom and Pop." I finally sold some of my shares to a key employee and handed my husband the rest of the company just to get out. Of course with the economy being in a slump when that happened, all of my proceeds went to our household and so I personally didn't see a dime. Add to that it's hard to get a job do to the present market, my age, and the fact that thanks to the way my husband insisted we run things - which kept me snowed under with clerical work - I never developed my career skills properly. If we hadn't had the kids, I'd have left him during the worst of this.
my friend is in a bad partnership and needs to get out other partner has been offered money but wont take it he says he is not a bad person but has so many problems in work has lost just about all his family and friends. his friends arent his friends they call him all day during work hours and ask for money he makes good money and never has any he doesnt put any effort into his work or partnership my friend has threatened to leave and just start another business what can i do to help this friend
Just finalizing the sale of our business. My partner has no idea that my main motivation for getting out is that I just can't fathom working with her another day. We have such different ways of viewing situations, handling clients, communicating etc etc, I feel her presence at the company is seriously detrimental. I'm just thanking my lucky stars that I have a way out. Honestly, you have no idea what it will be like to work with a partner, even if you're friends. DO IT ALONE!!!
I have started a business with a freind some time ago, we were stragling at the begining but we are getting there now. My freind!Patner wants out but he is not willing to take money and go. he is asking me to close down the company.
If i don't want to close down business and he wants to close down, what is the legal standing?
NOTE. We dont have any agreement..yeah i know dump!
I currently am in a partnership with Napoleon and a blind investor. Investor does not ask enough questions but is prepared to drop alot of money into the company. I want out due to the bad business tactics and blatant lies by Napoleon 33% has changed to 20% over the last two months.. There is no paperwork drawn but several documents referring to me as partner. I have spoken to an attorney and attempting to sell my equity and future patent royalties to the partners just to get out of the company. Can I just leave and go operate the same type business or can they attempt to sue me for anything if I do?? Thanks, great hub here Rochelle
If your putting all the money in for a start up business and your "partner" is emailing all the contacts
how much should he be entitled to ?
I helped my husband start up a business (I as VP) over 13 years ago and we have done well. However, I quit a couple of months ago because of all the crap. I threatened to quit before if things did not change---My husband was wishy-washy changing things daily, letting employees run over him and always saying I was a ball buster. When some new employees were hired and our assistant was basically run off after 5 years of employment I was so angry at the treatment of her, that was the last straw. I feel that I lost my authority and morale a long time ago. When I quit, everyone says it was the best thing to do to save my marriage. However, quitting when you didn't really want to quit sucks! Also, you learn who is loyal and who is not in the aftermath. Through it all, I believe that certain men feel threatened by women.
I am in partnership with an unreasonable and verbally abusive man, who not onlly brings absolutely nothing to the table in terms of ideas and overall input, but he also had the audacity to complain about things which are perfectly fine and create problems. We (I) started this business in june this year and we've already been voted top of what we do (it's a hostel)by various websites. Still, i can't bear him- his abuse, his comments, the fact that thanks to my capabilities he's making money off my ideas....so i asked to be bought out- just cut my losses and run......run, run, run and do it all again on my own. PEOPLE, GO SOLO- PARTNERSHIPS ARE VAGUE AND EMOTIONALLY EXHAUSTING.
But, must admit that i'm very excited about the prospect of opening up my own hostel, which will be even better than my last one. And, god knows that he'll his down the drain. Pity, as it is a really nice hostel.
I offered to buy out my 50-50 partner who has become impossible to work with and the staff is complaining about him. He said he is not ready to be bought out. Now what do I do? How can I get him out?
Any ideas on getting rid of the ex wife/business partner?
Thanks to all that have posted on this website, it has been an eye opener. im in a partnership right now and i dont like any thing about it. All that it has done is tear my family apart . I dont know how to end it and i dont want this bussieness to come to a halt. i think that it is a great bussieness its just not me. I'm not looking for anything but to get out of it just want out how can i do this with out crashing the biss., or having to take something. im at a lose in my life and dont know what to do. This has been an emotional, physical, and down right stressful. I just need a little bit of assitance in getting out of this. i want to start MY OWN but a partnership will never be a chocie ever again any suggestions would be great . Once again thank you to all that have wrote on this page it really gives me insight to how often this happends and not to sound rude but im sure some feel the same way, and that is dumb. Atleast i do.
1) Never start a business with a family member or hire a family member
2) If you find yourself doing ALL the work in a partnership, disuss it openly or dissolve it immediately. Either wise you will SUFFER. Suffering is spending energy on things that are 1000% beyond our CONTROL
3) Never start a business with a friend. Eventually emotions will over run logic and cloud our left brain, or decision quadrant.
4) Hire a lawyer. Pre-paid legal is best and cheap.
Right now I am dealing with, shall I say, a friend whom I started a business with. One of our businesses I spent close to $4,000 on an event and got nothing back but complaining and regret.
You would think I would have learned my lesson, but I did not. So now we are doing a bigger deal and there is even more money at stake. Unfortunately I am doing all of the work, the calls, the appointments, the showings, the contracts, everything. My partner just sits around playing xbox and trying to get his girlfriend, who is a complete cuck, I mean straight outta the G building.
So the lesson I am learning is expensive, stressful and could have been avoided if I would have dissolved my LLC after my first 4 gees.
I was given 10% of a company 14 years ago. I had started working for the company as a Machinist with 5 other employees and the owner decided he was going to "give" 2 of us 10% each. I have paid taxes over the years on dividends and then we "re-invest" the dividends back into the company to help it grow (we did not have the cash to disberse). I receive a K-1 every year. The company now has sales of approximitly 8.5 million with 72 employees. I want to leave to help my son with his business (another machine shop) and would like some advise on how to exit. I do not have a non-compete agreement nor do we have an owners agreement (which I have insisted we do from the start). Can you help?
my brother got into a business with a parner less than a month in the partner barely showed up didnt put hours of work into the business or money at that fact. my brother spent over 60 thousand dollars for a company that he could have just did himself. its an early business that sees a bump in the beginning is there an easy way to get rid of that bump and continue with smooth driving
Jenny with the Hostel posting 4 months ago - could, would you contact me - I would like to know if you can help on a project. drusle@aol.com
my father has not been with his patner for apox 4 years and still wants out of the buisness. Its like only the buisness name exists because no one is working under it, but his partner will not sign him out and we just dont know what to do. Our soliciter and the partners soliciter are not communtcating as they dont get along and we keep getting the run around. Its like a mouse on a wheel and has been going on for to long. Please if any one can help, what can we do to make him sign us off? Thank you....
Advise please- my husband owns 10% of a company for the past three years, they are stilling pawying the business off to the ex oweners wife and kids, he works long hours and is going to lose his family soon, how can he get out of this deal, he says if he leaves they can sue for his share of the business, i have tryed to look at the contract and do not see anything like that, is there any one that can help
Hi I'm in a partnership with two other people. We are all equal partners. I feel its time for me to leave. We are financially successful. One problem is we have no aggrement as far a s dissolving our company. I'm sure my two partners will continue. Whats steps do I take to determin the value of all of our assets equipment etc.
Help!
My boyfriend went into a bar with his friend of 10 years. My boyfriend put in $55000 and his friend put in $10000, my boyfriend wanted to be the silent partner and was happy for his friend to run the bar as long as his accountant oversaw it all and the friend was to keep all the books up to date. It has been 3 years now and my boyfriend hasnt seen a cent. The friend pays himself a wage and has now opened up an art gallery on the same street and keeps saying that the bar is not making any money although it is busy and they have bands and a great menu. The friend has been stalling on the books as well but from the books he has handed in they all say the bar is not making money. We are now waiting on the accountant to finish the books for the end of financial year and my boyfriend has told the friend he wants to get out but the friend says "he has not money" He lives upstairs from the bar and runs it and pays the staff cash in hand. It is causing so much stress in my relationship I just need to know what to do?
HELP!
hi i have taken some money from my business and now my partner wonts me out, he has gave me two options to work away with just my tax and n.i bill or shut the business down and split the debt athougth the company is not in debt, can any one give me a little help with this many thanks
I'm in a partnership, I hold 50% and have 2 partners (a married couple) who have 25% each, I do all the work, they 'take care' of the finances, we've been in business for 2 1/2 years and I've been treated terribly, I have NEVER seen the accounts after repeated requests and even when a solicitor requested them they've said no, this is illegal, but without the money to take her to court I'm stuck. I am paid lees than minimum wage and living on the breadline, I can't access housing benefit, free prescriptons and the like as they all require proof of income which they won't give me, I can't walk away because as a 50% shareholder in a business I won't get benefits, they've underpaid one of my staff by thousands and there's nothing I can do, so depressing, and I can't get any free help as it's business related ,this can't go on!
I have been working with my old man 38 yrs now , when we started work it was in a back yard .over the years we have grown .We now owen a building on the main street . problems started years ago. we never wrote a contract over years but i have put all the i have made back into the place. he wrote everything down but over the years seems to have lost the ledger.. being he was dad i never worried about it.now a days i am 50yrs old ,had a heart attack and want my money!since i now longer work his buiness has gone down .. he has always worked the office and i have always worked the shop area.. hell for the last 10yrs i worked for nothing 200$ a week my son has always asked way dont you get married or have a girl friend its been so bad all i can tell him is i can`t afford one.I could go on &on but i will spare you all..what percentage do you think then split should be I need some help " SLOWER "
I need advice. 12 months ago, I had been laid off and a man I know was also laid off. He thought it would be a good idea to start a business, I supported his thought because he seemed like he would do good. Big mistake. I found out he was an alcoholic, and he became verbally and then physically abusive towards me. During one of our meetings with an educator (we were interviewing teachers) he broke out a bottle of beer and proceeded to drink from in in front of her. Anyhow, long story short, he says that he blew through $100,000.00. I know that he hasn't, we started off with little money, but I knew that he drank a lot and had a lady friend that he was paying her rent and bills. I finally started my own business and let him know I was going to work elsewhere, now he mentioned something along the lines that he is expecting his money or investment to be paid back. Can you believe that?
What should I do? We never had a contract. I believe that it was his choice. I always said I would help him, he would call me the co-owner or business partner, and I would always say that he was my boss. Please advise.
keith o brien 3 years ago
Thanks good advice here.Just ended a business partnership and feel very releived.Went into it blind to be honest.Going to sit back and have a nice cold beer....no more 50/50 crap.