Unmatched Experience

Our team is comprised of three well-respected names from the Arkansas Attorney General’s Office.

Is ending a partnership more difficult than you anticipated?

Your business has grown, thanks to the hard work you and your partner have put in over the years. Now, your partner wants to move on, and you want to buy him out.

However, despite the partnership agreement that exists, you face some snags you find difficult to resolve. Meanwhile, your relationship with your partner is becoming strained. What now?

Agreement issues

You put together a basic partnership agreement that worked well enough because it outlined how you and your partner would divide responsibilities and operate the business. Unfortunately, the partnership agreement did not include a dissolution strategy. The main issue now is how the buyout should occur. Your partner wants a lump sum buyout, but you do not have the funds to manage that.

Considering the buyout

Your first task is to hire a professional to perform a business valuation to determine a fair price. Will the buyout be a good investment for you? Another option may be for you to take on the majority share of daily operations including making business decisions and handling financial obligations and liabilities. Taking this path would not make it necessary for you to go to the expense of a buyout. However, your partner may feel uninterested in becoming a minority partner.

Other options

If you do not have the funds to buy your partner’s share of the company outright, consider bringing up the idea of a payment plan. You could offer a percentage of equity in addition to the principal equity your partner already owns, similar to interest on a loan. However, if this is still unacceptable, you could think about selling the business, splitting the profit with your partner and going your separate ways.

Seeking guidance

Before you proceed with buyout negotiations, seek professional guidance and explore your legal options. Ending a successful partnership is a difficult and usually emotional undertaking. Keep the big picture in mind; you do not want to lose your business—or a friendship—if at all possible.

No Comments

Leave a comment
Comment Information

When You Have Questions, Contact Us For Answers

Need legal assistance or guidance? Do you have questions about a legal matter? Unsure if you even need legal representation? Whatever the problem you're facing, put your trust in our team at McDaniel, Richardson & Calhoun. Contact us today to get started.

Call our Little Rock, Arkansas, law office at 501-313-0461 or reach us via email by completing our online contact form. We routinely work with individuals, families and businesses in Pulaski County and others throughout Central Arkansas.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact Us For A Consultation

1020 W. Fourth St., Suite 410 Little Rock, AR 72201 Fax: 501-588-2104 Little Rock Law Office Map