Small business shareholders or guarantors can appoint or remove a company director by members at any time, providing such actions do not more…
Business partnerships can breakdown over time. This can be due to concern over one partner not contributing as much to the partnership, a disagreement as to how the partners operate or the misconduct of a partner.
They can also break down through no fault of the partners, and whilst the business is continuing to operate successfully, with the respective partner’s focus and objectives changing.
Resolve or dissolve?
Whilst some breakdowns are irreversible, seeking early legal advice is beneficial as the issues can be resolved through mediation.
If a resolution is not possible, the partnership will likely be dissolved. The partnership agreement should set out what will happen on the dissolution of a partnership, however, many partnerships are entered into without a written agreement being put into place.
On the dissolution of the partnership, its assets will need to be divided between the partners. One of the partners may wish to continue running the business (in a new capacity) and will therefore need to buy out the other partner’s share in the partnership.
Any dispute is likely to prevent the business from operating as efficiently as normal. By seeking legal advice early, you can limit the damage caused to the business and reach an early settlement in an amicable way, before the relationship breaks down entirely.