Business partnerships can add value to your organization and give you access to critical skills that you might not have. However, disputes could disrupt a relationship and leave you scrambling for a solution.
If you feel that dissolving the partnership is the most appropriate route, you will want to make sure to do it ethically. Careless behavior could harm your credibility and have legal repercussions as well. Knowing how to go about it the right way can mitigate some harmful consequences.
Analyze the contract
Prior to making any moves, analyze the contract you signed at the beginning of the partnership. Refresh your memory about the terms and conditions you agreed to. If you came to an agreement as to how to address dispute resolution early when the partnership was formed, it could provide insight into ways you can proceed right now. Making sure you know the contract can help you put together a dissolution strategy that aligns with your original agreement.
Draft a dissolution agreement
Irrational behavior can backfire miserably and could cost you resources to amend. Take your time to think through a dissolution strategy. Write an agreement that outlines how you will dissolve the partnership, including everyone’s expectations. Collaborate with professionals who can help you verify legal accuracies so you can avoid any undue penalties. The IRS provides instructions and forms for handling the tax ramifications when you close a partnership. You can include all these critical details in a dissolution agreement.
If dissolved ethically and professionally, you can close a partnership without many repercussions. Ending things as positively as possible can help you move forward without much disruption to your business.