In a perfect world, business partners who reach the point of parting ways would have a clear, unambiguous plan in place governing their separation. Unfortunately, when they engage in business in the real world, many company owners who need a Business Divorce find that they never adopted any type of separation agreement or that the agreement they have is missing key elements necessary to facilitate a prompt, inexpensive separation. This post therefore outlines a Business Divorce process designed to achieve a prompt, efficient exit plan for business partners.
The Exit Plan Should be Approved When the Investment is Made
For an exit plan to work effectively, it must be adopted in advance, because a successful Business Divorce involves far more than determining a buyout price based on an appraisal that supports the buyer’s or seller’s notion of value. In fact, a “ready-fire-aim” approach that calls for getting an appraisal, and then starting buyout negotiations is almost certain to result in a drawn-out, expensive process that may end with the parties in dispute. To minimize costs and reach an agreed outcome, both parties must adopt a process with a definite end-point—a successful separation. Continue Reading Avoiding Business Divorce Disaster: A Business Valuation Expert’s View