Business partnerships are often the backbone of strong and successful companies. You bring in partners for added insight and funding and to spread out responsibilities as well as liabilities.
As we’ve discussed, however, business partnerships don’t last forever. Visions, capabilities, and lives change. What your business partner wants today may differ from what you both set out to do at the very beginning. So, what happens when your partner approaches you about selling the business but you don’t want to?
Buy Their Interest in the Business
The most expensive option is to offer to buy your partner’s interest in the business. This option isn’t viable for everyone, but if you are able to and have the intention and desire to run the company without involving a third party then this is your best shot.
The partnership’s governing documents should already detail this process for you. It’s important to establish your company with a clause that allows partners to buy out another partner should a dispute arise or should a partner want out.
Short of this, however, there are a number of other options that stop short of forcing you to sell your own interests in the company.
Put Your Partner’s Business Interest on the Market
There’s more risk in this option, but a third party may have an interest in buying into your business partnership. This creates the ability to keep the partnership going while also fostering new ideas and opportunities for your business.
It may be scary to bring in someone you don’t know or trust, but a new partner brings new ideas to the table that can transform the business.
Litigate the Issue
If your partner insists and attempts to force a buyout or dissolution of the partnership, the issue may rise to the level of litigation. Some partnerships turn sour. If your partner is attempting to invoke a clause in the operating agreement or governing documents, you should speak with an attorney immediately.
Your attorney will assist you in determining the validity of your partner’s claim and protect you if your partner is attempting to use a clause outside of the spirit or text of the agreement.At Pence Law Firm, I proudly advocate for business clients in need of legal assistance in a variety of cases. Contact my firm if your Oklahoma business partnership is at risk.