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How to build business partnerships, and how to end them

In many ways, a business relationship is much like a romantic relationship. In the beginning, both partners are full of enthusiasm for the future, and it seems as though new and exciting possibilities are just around the corner. As partners move forward with their businesses, they rarely give a thought to how their partnership may come to an end.

But all partnerships come to an end eventually. Often, a partner retires from the company amicably after many successful years. But sometimes, the end can come sooner that either partner expects. Perhaps one partner loses the passion and interest that once drove the company forward. Or perhaps differences of opinion lead to irreconcilable arguments over the company's future. In such cases, business associates may find themselves locked in a partnership dispute over what share of the company's assets each partner should retain.

As a business moves forward and assets grow, it can become more difficult to determine how the company's assets should be split when a partner exits. It is advisable, then, that partners discuss the rules for exiting the business at the beginning of their association. Partners will find it easier to reach a fair agreement when there are not yet any assets to fight over.

In many cases, however, a dispute is inevitable. As businesses grow, partners tend to lose touch with each other. Often, they assume that their own contributions to the company are greater than those of their partners. This can lead to bitter and emotional disputes over the proper way to divide assets in the event of a partnership's dissolution. In some cases, the assistance of a business law attorney is necessary to determine the legalities involved in a business partner's circumstances.

It can be difficult to end a business partnership, especially under less-than-happy circumstances. But partners should approach the subject candidly and open-mindedly, with a reasonable view of the other partner's contributions. This can ease what can otherwise become a painful and acrimonious process.

Source: The Christian Science Monitor, "Making strong business relationships," Dr. Jeffrey R. Cornwall, Nov. 26, 2012

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