While no one goes into business expecting to have to “breakup” with their business partners, it is something that all business owners should plan for, just in case. Business relationships fail for many different reasons. Business partners may have long-term disagreements, a change in leadership, or simply a desire to go in different directions. While the break up may still be hard, there are some things business owners across Virginia can do to help prepare themselves for the end.

First, it’s important to realize there are different ways a business breakup can go, depending on the circumstances. For example, one business partner may want out of the business, but the remaining partners want to keep the business going. Alternatively, all business partners may decide to just get out of the business altogether. If the business is ending altogether, the company will go through business or partnership dissolution and eventually termination. Business dissolution is the “winding up” of affairs of the business, before the business actually terminates. This phase typically includes paying all outstanding debts and liquidating or distributing remaining assets of the partnership. Termination of a business is when the entity ceases to legally exist. There may also be differences in the process depending on the specific entity your business is structured as. The dissolution of a stock corporation won’t look the same as the dissolution of a general partnership or limited liability company (LLC). (In this article I often use “partner” and “partnership” loosely and am not referring to an entity structured as a partnership.)