How to Resign From a Business Partnership
1. Compile evidence showing how you participated in the business and how much you contributed. Write a succinct summary of your contributions, with a timeline detailing when they occurred. Show financial contributions, time spent planning and working, intellectual contributions and anything else you contributed.
2. Find a lawyer with a specialty in business law. Show him all official documents you signed, such as your contract with other partners, leases and loan agreements. Also share evidence demonstrating the official status of the business.
3. Determine what ideas or clients you wish to keep after you leave the business. You may feel guilty about taking important aspects of the business with you, but evaluate honestly whether you believe you're entitled to keep them. Work with your lawyer to determine what intellectual property or clients you are entitled to take with you.
4. Ensure business records are accurate and up-to-date. Determine whether taxes have been paid and whether the business had paid back its creditors. If not, consult with your lawyer. By inspecting the records, you'll know your liabilities.
5. Work with an accountant to determine how much payment you're entitled to for your share in the business, as well as continued proceeds. If you've contributed to the planning of the business and development of products or services, you may be entitled to periodic payments.
6. Consult with your business partners about your decision. State what you wish to do and listen to your partners' concerns. State how much you believe your stake is worth, or let them know you'll provide a statement from your accountant. Also tell them what you wish to take with you, such as a product concept. Stay calm and rational, not emotional. Talking beforehand with a trusted friend or spouse will help you let our your frustration or anger so you can stay professional in your meeting.
7. With your lawyers, draw up a written agreement of what you'll receive upon leaving the partnership and when payments will occur. Conversely, if the business is in debt, determine what you owe. Stay calm and poised, even if your partner is upset. Remember that even if your partner is angry that you're leaving, he must cooperate in negotiating an exit strategy.
8. Prepare and send a letter to anyone else who has signed a contract with your business, informing them of the transition. Keep the letter professional and to the point, of course, avoiding any awkward details. Assure them that you appreciated the chance to do business with them. Send a separate letter to clients you wish to take with you, alerting them to your plan to start a new business.
Credit: Melanie J. Martin