The creation of a new business is a time of excitement, exhilaration, and adventure—but there is usually a big dose of stress and anxiety thrown into the mix too. Along with coming up with a product or service that customers will be eager to buy, you must perform solid market research and scrutinize the competition in your area, create a business plan, and most importantly: come up with the capital to sustain your company for years to come.
Opening a business alone takes a brave soul indeed, but that may not be necessary if you have one or more partners; in fact, brainstorming and coming up with creative ideas with friends or associates may be what led to the idea of opening a business. There can be safety in a group, as well as much better stability for a beginning small business. Where you may be weak, your partner may be strong—and vice versa. Along with funding, you and each of your partners may lend specific talents to the new business, adding to the strength of your venture and helping you appeal to a wider group of customers.
The goal is to create a vision and then continue to grow throughout the years, practicing good financial management, and building on success in the community or wherever your target base is located. Over time though, you or another partner may decide to move on to start another career or another company. While terms of dissolution or exit strategies should have been fully outlined in the partnership contract created by an experienced business attorney, when the day comes to deal with the loss of a partner for whatever reason, you have every reason to be concerned about the future of the company.
As a partner leaves and a buyout is on the table, you and the others may be given the first right of refusal. If you or others have the financing or available cash to satisfy the buyout, that’s one issue taken care of—amidst other responsibilities to make sure that the partner can be replaced in terms of their duties and experience level. If you do not agree to the buyout offer though, or simply cannot afford it, there is the possibility that the partner could sell their shares to someone else—as in, someone from outside the company, with the possibility that a complete stranger would be joining you at work in the near future—or at the very least, be enjoying a stake in the company you built.
Although emotions, opinions—and even resentments—may run high during such a time of transition, your priority must be the business. Financial stability, integrity, and strong cohesion with the partners who are left must be the focus. This is a time for good communication and civility among all involved, as well as enlisting the expert legal advice of an experienced business attorney like Shane Coons.
Call for a consultation now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We will be glad to review your case, answer your questions, and help you move forward with success.