Should You Dissolve Your Business Partnership?

Most business partnerships start out because one or both partners was afraid to strike out into the business world alone. It is much easier to become an entrepreneur with someone by your side than by yourself, mostly because it means sharing the responsibility as well as the success. Unfortunately, however, many business partnerships are ill-conceived and should never have been pursued to begin with. Only the most carefully designed business partnerships will succeed; they require mutual trust, the highest respect and common goals. If you have run into trouble with your partner in crime, you might be wondering if you should dissolve your business partnership.

There are so many complicated factors in this decision that it cannot possibly be discussed in full in this article. Whether or not you should dissolve your business partnership will be a decision based on personal circumstances rather than a formulaic, step-by-step process. What works for you will not work for someone else, so I'm going to guide you through the process of evaluating your business relationship, which will allow you to make an informed decision.

What type of business partnership do you have?

This is an important question, comprising economic factors as well as legal ones. A general partnership will be much easier to dissolve than an LLC or corporation, though any business can be dissolved. Consider assets that you and your business partner share, your customers, your inventory and any other factors that might influence the decision of whether or not to dissolve. In some cases, even when the partnership is sour, it simply doesn't make good business sense to dissolve. Obviously, if you can't overcome your differences, something will have to be done; however, you should be aware that you are facing a lengthy and potentially expensive process.

Why are you unhappy with your business partnership?