What if a Business Partner Wants to Buy Out Your Ownership?
If you and a partner own a business together, there may come a time when your partner may decide he wants to buy out your shares. If this occurs, you could end up no longer owning your own organization. Usually, this happens as part of a partnership dispute, and you would leave the business altogether once the transaction is complete. However, there are all sorts of reasons why one business partner could end up wanting to buy out another. 
If your business partner wants to buy out your ownership, the steps to take are going to vary depending upon whether you want to sell or whether you don’t. Regardless of which option you would prefer, an Irvine business lawyer at Brown & Charbonneau, LLP can help you to understand your legal rights, and can help you to protect your own interests as well as the interests of your company.
What if a Business Partner Wants to Buy Out Your Ownership?
If a business partner wants to buy our your ownership, the first thing to consider is whether you want to sell it or not. If you want to remain an owner in the organization and you don’t want your partner to buy you out, you will need to say no and you may need to fight out the issue in court or in arbitration.
If your partner wants to buy out the business because you are no longer getting along, continuing to work together can be awkward or impossible. Consider whether remaining a company owner is worth it and whether ongoing disagreements could end up undermining your company success. Consider, also, whether it may make sense for you to also try to buy out your partner if you don’t want to sell but you can’t keep working together.
If you may be open to selling your ownership shares in your business, there are other important considerations as well. For example:
- Do you have a buy-sell agreement? If you do, the agreement may provide details on how buyouts will work and what the process is. If you have a legally binding buy-sell agreement, you’ll need to follow it as the business changes hand.
- Do you know the value of your company? If you aren’t certain what your ownership shares are worth, you will need to get the business professionally valued.
- How will the partner buy? Buying out a business can be expensive. Will you be paid a lump sum or will you be paid over time. If you are to be paid over time, are you confident the business will remain operational and you will get your money?
These are just a few of many important considerations when a partner wants to buy your business. If your co-owners have made you an offer or are suggesting a buy-out, you need to get the right legal advice to make sure you make informed choices.
Call Brown & Charbonneau, LLP today to speak with an Irvine business lawyer who can assist you at all phases from deciding whether to sell to structuring the transaction to completing the transfer.
