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I have fallen out with my business partner after 18 months of starting the venture and I don’t know how to go about getting out of the arrangement without damaging the business. What can I do? He invested €20,000 at the start.

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I have fallen out with my business partner after 18 months of starting the venture and I don’t know how to go about getting out of the arrangement without damaging the business. What can I do? He invested €20,000 at the start.

The first point I would make is that every partnership should have a strong partnership agreement to cover all eventualities of the business, including the steps necessary for dispute resolution.

In the absence of such an agreement, the first obvious fact to determine is confirmation that your business partner is willing to be bought out of his share of the business. If he is unwilling to depart from the business, some form of arbitration will be necessary in conjunction with the steps I detail below.

Determine the following:

In order for your partner to leave the following needs to be determined:

An up-to-date value of the business
An up-to-date statement of all assets and liabilities, reflecting not only the cost of same, but also their current market value (highly appropriate in today’s market)
An up-to-date list of all contracts
Details of any potential future or contingent liabilities

Armed with the above information, I would recommend that both partners obtain the appropriate legal and professional advice in order to complete their respective valuations of the business.

Businesses with partnership agreements

In the case of businesses with partnership agreements the business auditors/accountants may provide this information on an independent basis.

At this stage, both parties will become engaged in negotiations based upon their respective valuations in order to determine a buyout price and payment terms.

In addition, a non-compete clause may form part of the buyout terms and conditions.

Answered by

Nick Linnane

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I have fallen out with my business partner after 18 months of starting the venture and I don’t know how to go about getting out of the arrangement without damaging the business. What can I do? He invested €20,000 at the start.

Meet The Experts

Determine the following:

Businesses with partnership agreements

Answered by

Nick Linnane

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Education

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Networking

Support

Technology

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