1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

A Texas Business Law Attorney’s Guide to Surviving a “Business Divorce” (Part 2)

Texas business law attorney, Richard “Ric” Armstrong, talks in more depth about dissolving a Texas business partnership.

You just discovered that your best friend from childhood (and business partner for decades) has been hiding assets in an offshore account. Or maybe you and your co-owner keep screaming at each other in the conference room (where, embarrassingly, everyone can see you), and it’s make for the exits. Or maybe your partner wants to push the company in a direction that you consider ridiculous.

If the differences are truly irreconcilable, what steps do you need to take? Try these (building on our list from last post):

• With your attorney’s help, closely examine your partnership agreement and all other relevant legal contracts. The partnership agreement or LLC operating agreement should contain terms to assist you with dissolving the relationship. But is it enforceable? Does it cover your particular contingency? Will you or your partner likely challenge certain provisions in court? Similarly, perhaps you co-own a building or a contract from a big supplier—and these contracts also need to be assessed. If you’ve been doing business together for a substantial amount of time, you might be surprised by just how tightly you’re intertwined. Clarify the inventory of your agreements ASAP.

• Determine how you will end the partnership or other entity. In our original post, we discussed the importance of clarifying not only your position (i.e. what do YOU need, and what would be the ideal resolution for YOU?) but also your partner’s. Using that information—including your best guesses about your partner’s best case scenario—visualize great outcomes with your attorney’s support. Should one of you buy out the other? Should you close the company entirely? Are there smart options you’re overlooking?

• Divide assets and debts. Determining who gets what—and who pays what—is often based either on percent of ownership or on the portion of assets each brought into the company at the beginning.

• Make it official. In many cases, dissolution of the company can be accomplished by a simple vote. Determine whether you need to file paperwork with the Secretary of State, and do it if necessary. (In simple Texas partnerships, you don’t.)

Because dissolving a business partnership can get complicated even in the best situations, work with an experienced Dallas business law attorney to navigate the details and get it done properly. For an appointment, call Armstrong The Law Firm, P.C., at 972-424-L-A-W-S (5297).

www.planobusinesslawyers.com

Richard L. Armstrong, Principal

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

Fort Worth Location (By Appointment Only)
5601 Bridge Street, Ste. 300
Ft. Worth, Texas 76112

Phone: (972) 424-5297