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Thinking about buying out your business partner?

On Behalf of | Feb 15, 2023 | Business Law |

When entering into a business with your partners, you share common goals and priorities. But when one of the partners has a change in priority, they may decide to leave the organization. When that happens, another partner may exercise their right to buy the departing partner out of the business.

But what does “buying out your partner” mean? This simply means buying their share of the company.

What is in it for you?

Before taking any action, you have to decide why you are interested in the buyout. You may want to ask yourself the following questions:

  • What do I want to achieve with the buyout?
  • Is a buyout necessary?
  • Is it the best option for the business?
  • Will I gain a substantial financial return from this?

Once you understand your motivations, you will be able to assess the terms you are willing to compromise with the other partners. Establishing your goals and motivation may make the buyout process smoother.

Getting your foot in the door

Like any business decision, entering into a buyout agreement could be a complex process. So where do you start? Before anything else, your intention to buy out your partner should come across clearly and confidently. You have to consider that they will also decide if it is the best option for them. From there, you can move forward and discuss all legal or financial considerations of the agreement.

Whatever your motivation is for the buyout, you have to make sure that it is the best move for you and the business. If other options are available, make sure you take time to explore them as well.