Many New Yorkers operate their businesses in partnership with at least one other person and possibly several people. While some of these are true general partnerships, other business organizations, such as an LLC, operate in many respects like a partnership. In any event, this form of business often is a great way for people to pool their resources and talents in order to turn a profit and earn a living.
However, as with any type of business, sometimes a New Yorker realizes that his or her partnership simply isn’t the best way to conduct business any longer and therefore will want out of the arrangement. Although this can be done amicably, there are often hard feelings and difficult financial questions that surround the end of a partnership, and these can boil over in to a full-blown partnership dispute.
The best thing to prevent litigation at the end of a partnership is to have a well-drafted and thorough partnership agreement at the outset of the business. A good agreement will specify the rights and duties of each partner, and it will also discuss what exactly will happen should a partner withdraw or decide to sell out or, alternatively, buy another partner’s shares.
Of course, even the best agreements can still be subject to contract disputes, so it may be a good idea to have New York partnership agreement reviewed before taking action to sever or fundamentally change a partnership.
In the absence of an agreement, partners who are trying to split must look to New York’s state laws regarding the break-up of partnerships or must try to get things worked out among themselves. This can prove to be a difficult and complicated process, and sound legal advice and assistance is often important at this stage.