If you become a partner in a North Carolina business, it likely will surprise you to learn that should you or one of the other partners desire to leave the organization, the process can be quite similar to a divorce. In fact, according to entrepreneur.com, your partnership faces a 20%–30% greater likelihood of breaking up than your marriage does.
To carry the divorce analogy further, many of the reasons why business partnerships break up mirror the reasons why marriages break up. For instance, the goals and objectives of business partners may diverge over time. Or the partners can simply start getting on each other’s nerves, culminating in more time spent arguing than on running the business.
Partnership agreement
Any time you enter into a business partnership, you and the other partners should negotiate, draft and sign a written partnership agreement that spells out in detail all the following:
- What ownership percentage each of you will have
- What percentage of business profits each of you will receive
- What percentage of business losses and liabilities each of you will be responsible for
- What responsibilities each of you will have with regard to managing and running the partnership
- What buy-out provisions and methodology all of you agree to in the event one of you dies or decides to leave the partnership
The more specific and detailed your partnership agreement is, the easier and less contentious the break-up will be should irreconcilable differences arise between and among partners.
This is general educational information and not intended to provide legal advice.
