Breaking up is hard to do

what you need to know as a business partner about breaking up

YOUR BUSINESS PARTNER is not pulling their weight. Unless you can lower your expectations there will come a time when you decide to go it alone. You go to the lawyer who has been acting for the partnership to whinge about the other partner. However, he tells you that he has a conflict of interest and he cannot act for you.

You choose another lawyer. He will be tempted to lecture you on the imprudence of entering into business without a partnership agreement. If this takes any more than half an hour then you may not have made the right choice. Of course you don't have a partnership agreement! Who does the lawyer think you are, BHP?

If you do not have a partnership agreement then the law generally lays down about ten ground rules:

The lawyer will advise you that it is in your business interests to have an amicable split. You know this too but you feel bitter and find it hard to put the relationship down to experience and walk away. You have only been together for a year or two and, although the potential is great, in reality the partnership is not worth anything.

Here is a seven-point checklist of the predictable disputes between partners who do not have a partnership agreement:

Many of the predictable disputes can be anticipated by a partnership agreement at the outset as it will provide for a mechanism in the event of a breakup. To fight over the carcass of the business normally involves legal costs. Therefore only fight if it benefits you (not just to wind-up your partner). Ask yourself 'What's in it for me?'. If the answer is 'nothing much', opt to shake hands and move on.

.

© Paul.Brennan 2005. All rights reserved.




This article first appeared in My Business Magazine. Click here for a printer friendly version.

Click here if you need to speak to a lawyer.

Click here for legal books and eBooks by Paul Brennan. 

Sponsored by :


Paul Brennan, lawyer

sponsored by Brennans solicitors - a Queensland, Australia law firm - Individual Liability limited by a scheme approved under professional standards legislation.
ABN 60 583 357 067
email: info@brennanlaw.com.au

Please see the copyright notice and legal disclaimer