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A Dallas Business Law Attorney’s Guide to Surviving a “Business Divorce” (Part 1)

Dallas business law attorney, Richard “Ric” Armstrong, shares what you need to know about ending an intimate (and potentially profitable) relationship the right way.

We all hope it never happens, but occasionally good friends make bad business partners, causing a rift in the relationship.

Alternatively, maybe you and your partner came together strictly to build up a company. You achieved some success, but then things turned south—possibly because you held opposing visions for the future; possibly because of an ethical issue or misunderstanding.

In any case, you now find yourself at a crossroads. There’s an irreconcilable disagreement. You’ve come to the end of the road. So how do you separate legally, cleanly and with as little personal damage as possible?

Insights on Dissolving a Texas Partnership:

• Strive to separate the friendship from the business. It may not always be possible, but if you went into business with a friend unadvisedly, perhaps dissolving the business can preserve the friendship.

• Understand your own needs—and your partner’s. What does “success” look like to both of you? What standards should apply to the situation? Articulating your vision and standards—perhaps on paper—can give you useful decision making criteria.

• Understand your legal obligations to one another, contractually and otherwise. Did you sign a partnership agreement? Has a qualified Dallas business law attorney reviewed it? What other arrangements have you made together, and what relevant laws might apply?

• Get creative. Just because you will no longer be equals doesn’t mean you (or your partner) can’t still play a role in the company. Perhaps, for instance, he wants to retain a sizable share or investment in the company and serve as an advisor while he captains his own ship. Perhaps there are creative ways you can buy out his interests without taking on too much risk or disturbing your cash flow. Etc.

• Keep emotions in check. Decisions made in anger rarely produce good results. Avoid being vindictive. Give yourself “cooling off” time before making significant choices that you might regret later.

• Be as fair as possible. When dividing assets and liabilities, consider the other person as well as yourself. Show restraint; be true to your values; negotiate terms that both parties can live with for the long term.

• Don’t go it alone. Even if your split doesn’t involve acrimony or accusations of wrongdoing, you need to be careful.

An experienced Dallas business law attorney can help you end the partnership in a way that minimizes the chances of expensive, painful courtroom battles as well as unfair negotiations that shortchange you or the business you’ve worked so hard to build. Call Armstrong The Law Firm, P.C., for immediate help at 972-424-L-A-W-S (5297).

www.planobusinesslawyers.com

Richard L. Armstrong, Principal

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1 Comment
  1. All good points, but I truly believe that the best way to handle this situation is to never get into it in the first place. Relationships are hard enough; why throw trying to run a business into the mix?

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Armstrong The Law Firm, P.C.
Plano Location
1400 Gables Ct #103
Plano, TX 75075

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Ft. Worth, Texas 76112

Phone: (972) 424-5297