“Divorce” is a standard part of family law, pertaining to a couple who wants to end their marriage. Business divorce, on the other hand, is a professional split between two or more co-owners. As with the familial marriage, a business divorce is a legal process where the owners divide assets and debts and dissolve the partnership. It may involve transferring ownership to a remaining partner or selling it to an outside buyer.
Sometimes business can be personal
As with the end of a marriage, the business partners may have irreconcilable differences that make it difficult, if not impossible, for the partners to work together. The typical reasons include:
- Different management styles, professional goals or vision for the company’s direction
- Lack of trust
- Loss of interest
- Retirement
- Financial disagreements
- A general incompatibility or failure to compromise
- Lack of success
- Control issues
Disputes involving the above can take on a personal tone where partners become perhaps too emotionally invested. It may be a matter of making business decisions based on personal interests. When this happens, business is no longer “just business.”
What if it ends badly?
One partner may attempt to negotiate a fair and equitable agreement for dissolving the partnership, but their partner(s) may be unwilling to part on civil terms. It can lead them to tear apart the business, steal, create acrimony among staff, or otherwise harm the co-owner’s reputation. In such cases, litigation may be the only option for protecting one’s financial interests and professional reputation.