Whether you've had an emotional falling out with your business partner or are ready to retire and want to be bought out, dissolving or transferring your ownership in a business can be a complicated process. While it's important to seek legal advice whenever pursuing this step for your own business, knowing some of the basics can help you be more efficient when discussing your options with counsel. Read on to learn more about the logistics of dissolving a business or requesting a buyout of your share by your partner(s), as well as how you may want to handle some of the additional issues that may come up during your exit process.
How are businesses dissolved?
The dissolution procedure for your business will largely depend upon its corporate structure. With everything from C and S Corps to LLCs, LLPs, and 501(c)(3) charities offered throughout all 50 states and the District of Columbia, the procedure to dissolve your type of business will be outlined by your state's Secretary of State website. In just about every case, you'll be required to provide your partner(s) or shareholder(s) with a certain amount of notice of your intent to dissolve.
You'll also generally need to obtain agreement from your partners to dissolve -- unlike divorces, which are frequently no-fault, dissolving a business partnership requires a higher threshold of proof with regard to a breakdown in your business relationship. If your partners aren't willing to close the business, you may offer your share to them for a cash price.
What will you need to keep in mind when dissolving or exiting a business?
Regardless of whether you want your business to close or simply continue on without you, you're likely to want to end all public involvement with it -- especially if you're concerned your remaining business partners may be going down a bad path. Often, a sticking point upon your exit of a business that will continue on without you may be the use of your name or likeness to garner future business even after you've been bought out.
Fortunately, if you wind up fighting with your business partners about the use of your own name or likeness, you'll likely prevail in court. While you may not have the right to force the closure of your business when other parties have a say, you do have the right to prevent your name and image from being used to promote a business without your consent. For more information, talk to business law attorney.