One issue you might run into as a business owner in Florida is what to do when one of your partners wants to leave the company. This could happen for a number of reasons, and not all of them are related to business differences. For example, a partner might need to leave because they want to spend more time with family or move into a different line of work. They may be getting a divorce and need to sell their shares. When one partner wants to leave, the other owners have several options. Whatever option is taken, the health of the business must be prioritized.
Dealing with a buyout
The company could buy out the person who is leaving although this can get more complicated if the business is not making a profit. Ideally, when the business was created, the partners put an agreement in place that anticipated one of them might want to leave later. One element of this agreement might include a schedule for regularly having the business valuated. This can provide an objective figure that can be used to buy out the exiting partner’s shares.
Selling or bringing on a new partner
Failure to prepare for a partner’s departure combined with a business that does not have the capital to buy out the exiting partner could mean that the business has to be sold. However, there is also an option of bringing in an investor to replace the partner.
If the departing partner and the other business owners cannot resolve their differences, they might be able to do so through arbitration. In fact, arbitration to resolve conflict could be another item to include in the original partnership agreement.
Navigating formation, dissolution or change in partnership in a business can be complex because there are both legal and personal issues to be considered. People who are forming a business may want to consult an attorney about how to write a partnership agreement that addresses these issues. This can lead to a smoother process in the future if one person decides to leave. An attorney might also assist business owners if one partner is leaving.
