Mediating a Partnership & Business Dissolution
Ending a business partnership is a bit like ending a marriage. Assets have been accumulated and need to be divided. Depending upon whether one or more partners will continue in the same line of work, client relationships need to be addressed. There are also liabilities that need to be addressed. In order to properly separate, the partners need to decide if the partnership will be dissolved, continued on by one or more of the partners or sold. These issues should be explored in detail when trying to resolve the issues so that everyone is aware of the pro's and con's (i.e., liabilities) of continuing forward in the business. If the partnership is to be dissolved, there are IRS waivers that need to be obtained. It is more than just shutting the doors or handing the keys over to the new owners!
To adequately prepare for partnership mediation, everyone must be aware of all assets, liabilities, exposure, and rights of the parties. The relevant documentation should be shared in advance of the mediation, so that everyone can make informed decisions. Involve the company CPA if need be.
Partnership mediations can be quite complex, especially when there are more than 2 sides (i.e., a business with 4 partners).