There are several reasons you may want to remove yourself from a business partnership. For example, you may have disagreements about your business strategies or concerns that someone else is not carrying their weight.

To remove yourself from a business partnership in Maryland, you must first examine your partnership agreement for any procedures that must be followed when someone is leaving the partnership. If an operating agreement was not created for your partnership or it is insufficiently detailed, then you may need to go to court to address unresolved issues regarding your departure.

If you need help removing yourself from a business partnership, consult with our experienced Baltimore business advisory attorneys at the Heyman Law Firm by dialing (410) 305-9287 today.

Steps to Take to Remove Yourself from a Business Partnership in Maryland

There are multiple steps that you must take to remove yourself from a business partnership. Taking the following actions will help ensure that your rights and interests are protected:

Review Your Partnership Agreement

The first task will involve assessing your partnership agreement. Your agreement may provide a procedure for leaving your partnership or dissolving it entirely. If the agreement includes this information, then you should review it carefully. Failure to act in accordance with the procedure outlined by your partnership agreement can result in future legal conflict. You may review your agreement with our Towson, MD contract dispute attorneys to ensure that the appropriate course of action is adhered to.

Calculate the Assets and Liabilities of Your Business

You should also calculate the assets and liabilities of your business before initiating your separation from a business partner. This is particularly important if you are seeking to dissolve your partnership entirely. Examples of assets and liabilities that should be analyzed include the dollar value of your business, the assets owned by your business, liabilities to creditors, and each partner’s ownership interest.

If you and your partners cannot come to an agreement regarding these values, then the process for dissolving your company or leaving the partnership can become problematic. In this case, you may need to consult with legal representation in order to establish what your partnership is worth.

Inform Your Partner of Your Intention to Leave

The next step of the process will involve informing your partner of your intent to leave the business. This can be a difficult conversation, but it is important to remain polite. Amicable communication is more likely to result in an uncontested departure. Meanwhile, combative communication can result in a contested departure where unresolved issues must be worked out in court.

Still, you should prepare for the possibility that your business partner will engage in retaliatory acts upon hearing your decision to leave. You may wish to place a hold on all credit cards that are associated with your partnership and move shared funds to an account that does not allow for immediate withdrawals. Additionally, you may want to cap lines of credit on your partnership. This may seem excessive, but in some cases, it is hard to predict how people will react when their business partner leaves them. It is best to ensure that you are protected from any vindictive conduct that your partner may exhibit.

Draft a Separation Agreement

After informing your partner of your intention to leave, you should attempt to create a separation agreement. This agreement can address a wide range of issues that may arise with your decision to leave the business. For instance, the agreement should address how the company will go about removing your name from the partnership, how the business’s assets and liabilities will be distributed, and mechanisms for ensuring that debts from which your name is removed are paid in full.

Furthermore, your separation agreement should protect you from future legal conflicts. A proper agreement will offer formal assurance that you will not be held accountable for future negative judgements or lawsuits against the business. Your agreement should also outline a binding description of what happens if the business beaches its obligations to you. Finally, the agreement should also establish your right to audit the company’s records if you are owed payment.

If a separation agreement cannot be reached, then you must look to the original partnership agreement for guidelines on how your departure should be handled. If that operating agreement is silent towards the issue, then the state laws of Maryland will govern how the separation is to take place. If following state statutes results in an unfair outcome, then you may have to go to court to resolve certain issues.

Reasons You May Want to End a Business Partnership in Maryland

No matter how well your business partnership begins, the honeymoon period can end eventually. It is understandable that partners will have disagreements while operating their businesses. Still, the following are examples of reasons why you may wish to end a partnership for good:

Changing Values and Goals

You may wish to leave your business partner because you both have developed changing values and goals. For instance, you may want to take your company in a new direction while your partner is hesitant to embrace potential change. In that case, it may be beneficial to separate so that you can pursue your own personal ambitions.

Your Partner Acted Dishonestly

You may also wish to end a business partnership because your partner acted dishonestly. For example, a partner may act dishonestly by engaging in unethical activities that put your business at risk.

Your Partner Stops Caring

Finally, you may want to leave your partnership because your partner simply stopped caring about the company. If your partner is no longer interested in participating in necessary work, then it may be best to separate and avoid suffering the consequences of their inaction.

If You Need Help Removing Yourself from a Business Partnership in Maryland, Call Our Law Firm for Guidance

Seek support from our experienced Maryland contract dispute attorneys at the Heyman Law Firm by calling (410) 305-9287.