Starting a business is a major step in anyone's life. Whether it is a small business or a major corporation, there are certain steps individuals must take in Illinois to protect themselves as well as the company. When entering a partnership, one necessary document is a partnership agreement. This document helps define the partnership, especially when it comes to addressing profits and losses. But, what about when a partner wants to get out of the partnership or the partners seek to end the partnership? How can they protect their rights and interests in this matter?
Much like no relationship is perfect, no partnership is perfect. Each day, month and year could bring something new, and if conflicts arise or business issues persist, it may be time to end the partnership or make major changes. Because there are risks involved in entering a partnership, a partnership agreement not only considers how to handle the partnership itself but also how to address the dissolution of the partnership.
How do you dissolve a business partnership? To begin, it should be noted that there are various actions that could be taken when and if a partnership seeks to dissolve. In some cases, partners agree to it. One or more partners may have lost interest, so one partner seeks to buy out the other partners. This situation can be outlined in the partnership agreement.
One could also include a buy-sell agreement. This dictates who is or is not able to buy into the business if one or more partners seek to sell out, declare personal bankruptcy or suffer an event like death, divorce or disability. It is also possible to draft a dissolution agreement in the event that all partners involved seek to end the business. However, this document will clearly dictate when and how this could occur.
No matter the status of your partnership, it is important that everyone involved has taken measures to protect their business and their interests in it. Dealing with business law matters can be complex, however, it is possible to take steps to prevent and resolve them.