Sometimes it may not be possible to resolve a partnership dispute through informal negotiations, mediation or other methods, and the partners may decide to dissolve the partnership. In partnership dissolution, it’s critical to ensure that the interests of all stakeholders are protected.
If the partners decide to sell the business to a third party or some of them decide to run the business themselves by forming a new partnership after the dissolution, these factors must be carefully accounted for while dissolving the partnership. When the stakes are high, it makes sense to hire a skilled and resourceful mediator to enable proper partnership dissolution to the best satisfaction of all parties involved.
The Mediator will Steer the Discussions Based on the Reasons for Partnership Dissolution
In order to decipher the issues in partnership dissolution that must be resolved through mediation, as a first step the mediator will help the parties identify the reasons to dissolve the firm. A serious conflict of interest, activities of a partner that are detrimental to the firm’s business, insolvency or bankruptcy of a partner, withdrawal of a partner with mutual consent of other partners, or a material change in the relationship between the partners are some of the common reasons why partnerships are dissolved.
The mediator will encourage and facilitate all partners during the mediation process to share their reasons in a forthright manner so that a clear direction for the partnership dissolution can be determined. In many cases, the partners are family members or friends. The mediator will be sensitive to their relationship status, and handle the dissolution issues with extra care so that their personal relationship may continue beyond the dissolution without discord as far as possible.
The Mediator will Guide the Partners if they Plan to Continue Business After Dissolution
If the mediator ascertains during early discussions that some of the business partners plan to continue the business after the partnership dissolution, they will guide the partners to settle the business affairs accordingly. They will facilitate the process of a transparent determination of the liabilities of each partner as well as the distribution of assets.
If one or more partners plan to exit the firm, but the business will continue with the formation of a new partnership between the remaining partners, the dissolution will involve settling of the liabilities and assets of the exiting partners. If the business is permanently ending, then partnership affairs of all partners must be settled, including the pending contracts of any third parties.
When some partners plan to continue the business after dissolution, they may want to protect their business interests after the exit of one or more partners. The mediator will review their original partnership agreement and help them explore the possibility of getting the exiting partners to sign a settlement agreement that protects the future business from detrimental action with these clauses:
- Non-compete clause
- Confidentiality of business secrets
- Non-solicitation of existing clients
- Non-poaching of existing staff
- Protecting of the business reputation
The business partnership mediator will know from experience that a partnership agreement is the most important guide to enable the business to go through major transitions. The mediator will help the partners arrive at the terms of partnership dissolution that satisfy all the clauses covered in the original partnership agreement. This will ensure that the settlement reached through mediation gets the legal stamp of approval and there is no further scope for dispute.
Choose a Mediator with Experience in Handling Partnership Dissolution Settlements
The problem solving strategies and approach that your mediator adopts during the mediation process can facilitate a mutually agreeable resolution to dissolve a business partnership. Our top-rated partnership dissolution mediators at Advanced Mediation Solutions can help you explore your best options, whether you and other partners plan to permanently end or continue the business after dissolution. Call 856-669-7172 or reach us online to request a complimentary consultation today.