Business Partner Leaving

[jennas]

Hello. My business partner is leaving our business. We do not have a buy-sell agreement or any exit agreement for that matter. I want to stay but need a new partner. There is someone who would like to become my partner who has money to bring to the table. My partner is under the impression that she can sell her 50% directly to this third party, get what she would like for her share of the business and be done. I would like the third party to buy-in for a certain amount (enough to cover what my leaving business partner wants plus an amount that goes to me for the privilege of buying in). We have an s-corp by the way. Thanks for any thoughts.

[torka]

My thought is that if you want this to stay out of court, you, your outgoing partner and the potential purchaser need to consult with a lawyer, pronto. Find out what your options are under the law, and see if a neutral outside party can help you negotiate something that works for all of y'all.

And if you want to make sure this kind of thing doesn't happen again, before you go into business with this new co-owner, you'll have that same lawyer draw up some agreements to cover these sorts of situations going forward. For your own protection, as well as for the protection of your business, you should never go into business with anyone else without an exit agreement.

My

--Torka