Tips on How to Survive the Dissolution of a Business Partnership


According to the SongFacts.com website, in 1962-and again in 1975-Neil Sedaka had a hit song called “Breaking Up Is Hard to Do.” Sedaka was, of course, referring to how painful a romantic breakup can be. However, the breakup of a Texas business partnership can also be painful. This could be especially true if the partnership was composed of people who were friends prior to going into business together.

As observed in the Wall Street Journal, things can get a little “ugly” when a partnership goes south given that emotions can run high. However unpleasant the breakup of a partnership can be, sometimes it becomes necessary if disputes between business owners have taken a turn for the worse resulting in the paralysis of the business.

If a partnership has passed the point of no return, and dissolution appears to be the only viable alternative, there are ways to gracefully bring up the subject to the other partners. The author of an article published in the Huffington Post advises the following: First, try to be honest with your partners. Sit down with them and frankly discuss what you think went wrong and why continuing the partnership business is not a good option. Always think before you act. You never want to say something in the “heat of the moment” that precipitates a crisis and may torpedo any chance for an amicable dissolution of the partnership.

Communicating with as much transparency as possible may help since it allows your partners to know exactly where you stand. If you have thoughts about how to best deal with the consequences of ending the business partnership, you might want to work up some preliminary strategies and alternatives to share with your partners. If everyone comes to the conclusion that the partnership should be dissolved, it would be wise for each partner to hire their own attorney. This will allow the parties to negotiate at arm’s length without the danger of undue emotions entering into the negotiations.

Handling dissolution

YSF magazine observes that, if you are going through partnership dissolution, it is essential that you try to act in ways that permit you to maintain your integrity. Keep in mind that you need to be perceived as being scrupulously fair in your professional and personal dealings during the time of dissolution. Maintaining your reputation intact during and after partnership dissolution is critical if you intend to continue in business. Prudently, you should try to ensure that you are preserving all necessary business contacts you might need in the future.

There are three things not to do when engaged in dissolving a partnership. First, do not let customers’ needs “fall by the wayside.” Assuming you desire to conduct the same type of business in the future, allowing customer service to slide during a partnership dissolution can come back to haunt you since customers are sure to remember sub-par service. Second, do not speak negatively about any of the partners involved in the dissolution. Once again, remember that you have your business reputation to preserve. Third, never publicly broadcast about information to the public about the dissolution.

Seeking legal advice

If you believe that your business partnership has passed the point of no return and that dissolution is the only viable alternative, you should consult with a Texas attorney who has experience in handling legal matters pertaining to partnership dissolution.