Is it Time to End Your Business Partnership?

Partnerships fail for many reasons. Misalignment of personality is possibly the first reason that springs to mind, but according to the Michigan law firm Family & Aging Law Center, the two most common reasons that business partnerships fail is 1) failure to make an adequate plan, and 2) more importantly, from a legal perspective, failure to have a written partnership agreement that outlines in detail the partnership structure.

When it’s time to end a partnership, navigating the process can be difficult. The Small Business Association recently published the article: “Is It Time to End Your Business Partnership? Here’s How.”

Without a partnership agreement, dissolving a partnership can get nasty and

carry a lot of risk. For example, if a partner isn’t paying bills on time or making regular contributions to pay off a business loan. Lapses and disagreements like these can quickly spiral out of control and impact your creditworthiness, relationships with vendors and so on.

Sole proprietors can decide by themselves that they

should close up shop. Whereas if your business is a partnership, limited liability company (LLC), or a corporation you and your co-owners must make the decision to dissolve the entity, according to the guidelines established in your articles of organization. Remember to document the final decision with a written agreement.

Without a partnership agreement, dissolving a partnership can get nasty and carry a lot of risk. For example, if a partner isn’t paying bills on time or making regular contributions to pay off a business loan. Lapses and disagreements like these can quickly spiral out of control and impact your creditworthiness, relationships with vendors and so on

.