Business Divorce in New Jersey

You and your friend decided to start a business as partners. Like any relationship, everything was exciting in the beginning. The future looked bright, and you both were full of optimism. Then time goes by, and things start to deteriorate. Your partner is now barely a friend. He is not holding up his end of the deal. And you are miserable every day. What should you do? Maybe it is time for a business divorce.

It Starts with an Agreement

Before proceeding with a business divorce, we must look at your partner agreement, operating agreement, founder’s agreement and/or any other contracts that you have with your partner. When establishing your business, you should have had counsel to draft and negotiate these types of contracts. For this example, we will assume you do have agreements that govern the business and plan for contingencies. An effective agreement will address problems with your partner such as:

• Lying or stealing
• Failing to do his or her job
• Hiding information
• Making bad decisions
• Taking unnecessary risk
• Disinterested in the business
• Failing to compromise or communicate
• You just don’t like each other anymore

Again, hopefully your agreement lays out the obligations of each partner. Likewise, it should clearly lay out processes and remedies should any party breach the agreement.

Be Smart

Just like divorcing a spouse, a business divorce is an important decision – both financially and emotionally. Therefore, do not rush into one. Also, it is best to try to calmly negotiate and resolve any issues on your own before involving the lawyers. That said, quite often, a peaceful, practical resolution is not possible. Consequently, you need a lawyer to protect your business interests. An experienced lawyer can help you negotiate the exit of your partner, document the dissolution of the business, litigate a partnership or shareholder dispute, and all legal issues in between. And just to be clear, it is responsible and smart to plan for a business divorce. In other words, make sure you have the right agreements at the start of the business relationship.



Call Us

We know that each situation is unique and different. For this reason, we encourage you to call us to discuss your concerns. Whether you are starting a business or feel stuck in one, we will listen to you and guide you through your business divorce.