Are you asking: How do I sell my business to my partner?
There is no question to the fact that leaving a business can be one of the most difficult choices you have to make. Whether it is as a result of personal issues, disagreements or even for health reasons, the journey through leaving your business partnership is likely not to be an easy one. However, your mental health and happiness are essential. With that in mind, staying in your business may be doing more harm than good. In case you feel like you do not want to continue working on your business, there are a few things you can do to help the dissolution process take a lesser toll on you, your partner and the enterprise you worked so hard to help build. We review them below.
Consider your partnership agreement 1,3
This is the time to go back to the agreements you and your partner signed against at the beginning of your business. Hopefully, a written and signed piece of this agreement exists. This will ensure that you know all your options as you exit the business. You will need to understand the terms of leaving the partnership, and exactly what the clauses mean. That said, read through your partnership agreement and know exactly what is required of you once you choose to officially leave the business.
Talk to your partner 4
Sometimes, talking it out with your partner can significantly help you make a choice in leaving the business. This is especially so if your choice for leaving the company will be because of personal reasons. Try and air your issues out with your partner. If you can come to a consensus and avoid leaving the partnership altogether, this may be to your greater benefit. Alternatively, discussions with your partner might yield the fact that he or she is also thinking of leaving the business. In such a case, you might want to remain behind and take on a single managerial position. If this is not the case, then you can begin looking for interested parties to sell your business to.
Get a Business Valuation 2
Knowing the value of your business plays a critical role in your exit strategy. In case you are still interested in keeping part of your shares in the company, conducting a valuation will enable you to know the cost at which you should sell the majority stake of the company to your partner. If you want to completely clear out, getting a business valuation will give you a better perspective of the amount of money you expect to be paid for your shares in the company. In case you had a discussion with your partner and plan on selling the business, then a business valuation will help you identify the price range over which you will negotiate with potential buyers. Once you understand your expected payment better, you can then apply these details to your plans such as retirement or other personal ventures you might have in mind.
Hire an attorney 3
In case you plan on going through with leaving the business, getting an attorney will ensure all the required paperwork is filed in time. It will also help you focus more on your plans past the firm.
Go through this checklist and review your options in case you plan on leaving your business today.
Mathieu Paul
Director – Business Improvement
P: +618 6315 2755
E: enquiries@wabusinessvaluations.com.au
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
Liability Limited by a scheme approved under Professional Standards Legislation
Reference Links:
1. https://www.entrepreneur.com/article/191782
2. https://www.sba.gov/blogs/exiting-or-dissolving-business-partnership-your-options-and-process-explained
3. https://blogs.findlaw.com/free_enterprise/2013/11/5-key-steps-in-dissolving-a-partnership.html
4. https://www.huffingtonpost.com/young-entrepreneur-council/break-up-with-business- partner_b_1704389.html
