Much like a marriage, most business partnerships start out with the best of intentions. The business owners, known as the principals, come together intending to create something that will stand the test of time, but sometimes problems creep in and at least one of them will want out.
What happens next has to be carefully negotiated. One or more principals may want to leave but do not necessarily want to see the business fold. Instead, they want to receive a payment for their share. This is where it gets tricky and an experienced business divorce attorney becomes an asset.
What if you’re one of the exitting principals and you’re offered a payment plan over several years? There’s a risk that the business could fold and you’d have to get in the back of the line of creditors. What other risks are you unaware of?
What if you’re one of the principals who will remain with the business. How do you negotiate a non-competition agreement with your former business partners? What other common pitfalls do you face?
Just like a marriage divorce, you’re much better off in a business divorce with an experienced attorney at your side.