Dissolving a small business partnership

[Guest091823]

This site can be somewhat of a refuge so any insight is appreciated. I've reached a point with my business partner than seems unrepairable. What is the process for one person buying out another? How do you derive an amount? We produce custom furniture and craft goods so it's not a retail space. There are tools which would be considered assets and under a separate incorporation that we have with another partner, there is a building and an adjacent property. It's such a mess, and I sometimes just feel like walking away and saying "just take it", but, I've worked hard to get this stuff. Anyway, I know this is a random post, but I have a feeling one of y'all has been around this block. I'm bummed and just don't have the energy anymore.

[daddylongstroke2008]

The most simple answer is to let a judge divide it all.

There isn't a standard process to buy another person out.

There's a lot in the story that left out that will have a major impact on how you part ways such as how the business is legally structured, is there a partnership agreement, and so much more.

[Whistlestop]

There is a process I have seen in buyout clauses where one party has the right to make an offer and the other party has the right to buy or sell at that price. There is a legal name for it but I am not a Lawyer and don't know the name.

[Lovestolick66]

Hey Ohboy, if you still have my # send me a tex, and lets talk, i can probably help you with this, i saw our mutual friend last week ,she said tell you hello, your problem has some specific answers that are very simple, tex me and we will talk.

LTL

[Contralto]

Good question. It doesn't have to be complicated but can be if you're not on speaking terms. Here are a few thoughts from my own experience splitting one up.

1) Try as best you can to see things from the other's point of view and keep the communications open and civil. Once this is gone, you'll have to involve other people to communicate for you--lawyers, judges, etc. Better to swallow your pride now, and maybe even give away a few tools, than to make matters so complex. You can't put a price on sleep and being stress-free.

2) Simple letter agreements can do the trick, stating the terms and value of goods to be transferred. Values are simply what the other party is willing to pay. Make a list of the assets to be transferred and their transfer value. In reality, you are agreeing to pay only 1/2 of what the two of you agree to be the breakup value of the organization assuming each of you is equally invested. Breakup value can be loosely defined as what the assets (buildings, tools, name-value, etc.) would be worth on the street if you both sold out.

In the end, you'll be safer with attorneys but the ROI of their involvement is a judgment call only you can make.

All the best to you.