When you go into business with someone, there are bound to be ups and downs. However, in many cases, business partners are able to overcome their differences through compromise and dedication. Unfortunately, in other cases, there are differences that just cannot be overcome. If that is the case for you and you want to keep your business, you may eventually find yourself asking, How can I buy out my business partner?
How to Buy Out a Business Partner
Inc.com published an article on how to properly dissolve a business partnership. Here are the tips that the piece included regarding ending a business partnership:
- Check Your Partnership Agreement – When you and your business partner started your business, you may have had a partnership agreement drawn up. If so, your partnership agreement may include a plan for how you two would end your partnership if you ever decided to part ways.
- Have Your Business Undergo a Valuation – To determine a fair price for your buyout, you need to have a business valuation so you know how much your business is worth.
- Review All Your Options – In addition to buying out your partner, you may have the option of simply dissolving the partnership without having to buy him or her out or having your partner agree to take a minority stake in the business.
- Consult with a Business Lawyer – Even if you and your business partner expect to have a friendly split, you should hire an experienced business attorney to handle your case. A lawyer will ensure that a fair buyout is negotiated and that the buyout agreement meets state and federal requirements.
Why Should I Talk to an Experienced Attorney Before Attempting to Buy Out a Business Partner?
As experienced business attorney Gary Mason talks about in the following video, you should never trust the future of your business to just any lawyer. You need an attorney you are confident knows what he or she is doing and who can successfully assist you from the time you start your business through your retirement.