Business partnerships can end for many different reasons, here we describe the basic steps of how to buy out a business partner.
Obtaining the equity your partner owns in your business can be a confusing or often difficult process. Perhaps your counterpart in the firm could have gotten an opportunity elsewhere that he wants to focus on or, as is also common, there has been a personal conflict, and the two of you cannot stand each other. Business partnerships could end for many reasons. Some of the endings to partnerships could be peaceful and lead to the best benefit of both flanks under the situation. Alternatively, some partnerships’ endings involve pain, tears and a whole lot of lawsuits. Regardless of what kind of way the business ends, the tips below are necessary so as to ensure that you successfully buy out your partner.
Set Terms from the Business’ Beginning
By drafting a document explaining how the business will be run, decisions will be made, and responsibilities carried out, you can get a clear picture of how your enterprise works. Additionally, such a document would also include information on dissolution and what process should be followed in line with the efforts to buy your partner out.
Preparing such a strategy gives clear-cut ways procedure should be followed. As such, it is less likely either of you in any of your small businesses in Western Australia will get emotional over the whole issue and escalate the rift that could be forming between you. Operating with a partnership agreement is also easier as it can be used to seek the advice of an acquisitions attorney in what additional steps to take apart from getting your partner out of the running and ownership of the business.
Get to know How Much Your Business is Worth
You can know how much your business is worth by seeking a business valuation. Getting business valuation services ensures that you know exactly how much the enterprise is worth and as such get to know how much you should buy off your partner with. If you find the price of fully buying out your partner too costly, you could simply take over the finances, significant assets, and liabilities of the company and as such gain a majority stake in the business, which would give you more control of its working. A business valuation will assist you to not only know which assets are worth the most and you could target the ownership of these in Western Australia.
Seek the services of an acquisitions attorney
Working with the attorney will ensure the buyout process is legal under both state and federal laws. Additionally, the lawyer will help you understand the terms and conditions towards the buyout at a deeper level. The lawyer will also negotiate your buyout process for you, seeking to land a deal that would be in your favor.
Make it official
Once the buyout has finally occurred for your business in Western Australia, fill in all the paperwork required and file it with federal, state and local authorities within the area. This will help track the company down and ensure that your partner’s name is removed from all sources of funding as well as from the assets. As such, the business will be fully yours, or you will own a major stake in your business.
Also, make sure you keep being friendly with your partner. A better friendship with the partner you want to buy out could mean more time for you to pay him off as well as a probable source of funding for the buyout. Remember, getting a business valuation in Western Australia and making the whole process official are critical processes in evaluating your business’s track record.
We hope this article on how to buy your partner’s share of the business in WA has been of some assistance.
Director – Business Improvement
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