Getting a “Business Divorce”
Closely held corporations, limited liability corporations and partnerships usually involve co-ownership amon
g family members and longtime friends. When those relationships start to unravel—whether for personal or business reasons—the owners are still stuck working together until their “business divorce” can be completed. Divorcing your business partners is almost as traumatic as divorcing your spouse, and can be even more financially draining.
Nothing will take all the anxiety away, but the advice of attorneys experienced in these highly emotional cases can help you keep the tensions to a minimum and ensure that your finances don’t unravel along with your relationships. The Yaziji Law Firm has successfully handled many business divorce cases. We understand the available options and we understand the emotional component. It is our business to serve clients with integrity, work vigorously to see that they get justice and diligently ensure that they remain informed about all aspects of their case.
Figuring Out the Options
It’s important that your attorney really understand what you want to happen to the business. A really good, experienced attorney can even help you figure that out, in addition to letting you know what the range of possibilities are, and the options are numerous.
The first question—simple to state, often difficult to answer—is whether you are sure the working relationship and the trust that it requires, is damaged beyond repair, or are you still interested in trying to repair the relationship? If there is hope of repairing the relationship, we can work on adding terms to the agreements that govern the ownership of the business.
If the relationship is unsalvageable, we work with you to identify the best way to proceed. There are numerous options, including:
- Dissolving the entire business
- Having your interest purchased by the other owners
- Purchasing the interest of the other owners
- Working to have a third party purchase the entire business
Rarely is a business divorce uncomplicated. It’s important to understand two things about business divorce that complicate any case. First, attempts to disentangle the owners will require deep understanding of the laws that govern the specific form of ownership. Partnerships, closely held corporations, and limited liability corporations all present different problems.
Second, the kind of business involved matters a lot. Business divorces involving a dry cleaning enterprise are significantly different from business divorces involving a hotel or restaurant.
There is no limit to the number or kinds of other complications that can pop up when co-owners of a business have decided they need a divorce. A few common examples:
- Financial difficulties in the business, especially if the business is approaching insolvency
- Claims that one of the owners has acted improperly, possibly even illegally
- Disputes between the business and third parties, such as suppliers, lenders, and builders
- Claims by a government agency that the business has violated the law (environmental violations, violations of wage & hour laws, employment discrimination, and so on)
- Reluctance of suppliers and others to continue dealing with the business until the uncertainty is resolved
At the Yaziji Law Firm, we have the broad expertise to anticipate problems, avoid the ones that can be avoided, and deal with the ones that can’t.
Get Help Early Rather Than Late
Getting advice early is always better than getting advice late in these complicated cases. If things are bad enough that you’re concerned, it’s time to get help. If you have decided that the business relationship is dead, or if you have been told that by one of the co-owners, it’s time to get immediate help.
Call the Yaziji Law Firm today for a free consultation. We know what to ask and how to ask it to get problem to the next step.