Leaving a partnership can be a little like getting a divorce. In many cases emotions run high.
Once the decision has been made, it can also be hard to work out where to start with the planning.
Issues you need to consider include:
- What does the Partnership Agreement say about how the exit it to take place?
- What notice needs to be given?
- How will the Purchase Price be determined for the buy-out?
- What happens with work-in-progress (WIP), debtors, creditors, prepayments, etc?
- How is responsible for the real property leases (and guarantees)?
- What will be the tax impacts for the exiting partner and the continuing partners?
- Will the existing partner be under some form of commercial ‘restraint of trade‘?
- If the business turns down or loses clients after the exit, will the existing partner be required to pay back some of the Purchase Price?
For a full list of the issues you need to consider, download our Partnership Exit Checklist. Our Checklist contains 10 pages of useful questions that need to be answered and action that needs to be taken.
20190502 Checklist Partnership Exit Issues(Updated) 0 166 downloadsPartnership Exit Issues Checklist ...
To put in place an effective strategy for a quick and clean exit, call Andrew on 1300 654 590 for a confidential chat.
What to do next
We have seen business partnership break-ups go on for years (literally). The problem in most cases is that the Partnership Agreement (if there is one) does not have an adequately prescriptive process to follow for a quick and clean exit. To avoid things dragging on (and on) get us involved early. We have seen it all before, and can cut a lot of grief off at the pass.
Call us now on 1300 654 590 for a confidential chat.