Much as is true of romantic relationships, business partnerships start with the highest of hopes and expectations. But as time goes by and the realities of day-to-day challenges arise, so too can conflicts and disagreements, and eventually tensions can mount to the point where a breakup is inevitable. If that has (or is about to) happen to your business partnership, then a restructuring of the business entity is likely in order. If you were prescient enough to anticipate this possibility, your original business agreement includes a dissolution plan, and that will make things much easier. If you never thought it would happen to you, you’re not alone. Fortunately, an experienced business partnership attorney can help.
There are plenty of reasons for a business partnership to fail. In some cases, a partner simply loses interest in the business, or doesn’t have the time or resources needed to uphold their end of the bargain. In other cases, partnerships do not end agreeably. Joint decisions that once seemed straightforward and seamless suddenly become reasons for arguing, or tasks that you thought your partners would take responsibility for are suddenly not being done.
Restructuring a business partnership can be accomplished in several different ways. You can shift the percentage of ownership within a partnership if the one partner wants to remain involved but to a lesser degree, or alternatively you can dissolve the partnership by making arrangements to buy your partner out – or to sell your own shares if you are the one who wants to walk away. However you choose to move forward, you should always begin with creating a new business strategy guided by the change at the top. Doing so gives you the opportunity to redefine your company’s goals in a way that lets you measure your success and communicate to your employees and stakeholders. All changes need to be weighed against risk and assessed for whether they will improve the organization and its profitability.
Among the things that your restructuring plan should include are:
- New authorities and decision-making responsibilities
- Definition of roles and relationships among stakeholders and employees
- How to communicate the new structure to all involved
A restructuring necessitated by a business partnership breakup can place significant stress on your operations, but an experienced law firm can help you navigate the challenges. For information on how we can help, contact our office today to set up a time for a consultation.