A business partnership could be a long-term relationship that is mutually beneficial for both partners. It could persist for as long as a company continues to prove profitable or until partners decide to sell their business. Despite a positive start, partners may eventually find themselves embroiled in a conflict that could potentially affect the business they run together.
Maybe they have started to have different goals for the company. One may want to prepare to sell it, while the other wants to continue operating the business. Other times, the change in the relationship between the partners may have to do with one partner engaging in unethical behavior, such as embezzlement, or failing to fulfill their obligations to the company that they run together.
The end of a business partnership can easily turn messy, much like a divorce could. However, it is possible for someone to minimize the conflict that almost inevitably arises when ending a partnership. The following are some of the ways to reduce the conflict between partners when one partner wants to end their professional partnership.
Offer a reasonable buyout
There are many scenarios in which one partner may want to assume sole ownership of a business that began as a joint enterprise. A partnership buyout is likely the best solution in such scenarios. One partner pays the other for their interest in the company. Buyouts can easily lead to conflict if the offer is unreasonable or offensive. Knowing what the business is worth, adhering to the terms of a partnership agreement and making a reasonable offer could lead to more amicable discussions about changing ownership arrangements.
Gather evidence of misconduct
Sometimes, a partnership must end to protect the organization from the incompetence or misconduct of one partner. In such scenarios, the partner proposing a buyout that requires the exit of the other partner might be able to incentivize a faster and more amicable resolution to the situation by collecting evidence of the misconduct or professional failures that prompted their change in perspective. Someone who realizes they could be at risk of a lawsuit or prosecution may be more open to negotiations.
Pursue alternative dispute resolution
Even when a buyout or dissolution is inevitable, trying to reach an agreement with a partner can be a very difficult challenge to overcome. Many people do not agree with their business partner about what the company is worth or what about author should look like. That failure to see eye-to-eye could then lead to the disputes spiraling out of control, resulting in litigation. Sometimes, people just needed a little bit of help to see eye to eye or find ways to compromise. Both mediation and arbitration could be reasonable solutions for those preparing to negotiate a partnership buyout.
Exploring ways to reduce conflict levels, and seeking legal guidance as necessary, may benefit those who need to make changes to their current partnership arrangements.