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Grant Park Legal Advisors, LLC Blog

Wednesday, February 20, 2019

Breaking Up Is Hard To Do

As business partners ourselves, we understand the pros and cons of forming a business partnership or an LLC. Working with someone else allows you to pool your talents and your resources to provide better service to your clients. But it also means that you sink or swim together; you are as responsible for your partner’s actions as you are your own. If you and your business partner disagree about which path forward your business should take, it may be better to split up than to continue on together.

Unfortunately, when business partners decide to call it quits, the resulting fight can be worse than the nastiest divorce. Claims of disloyalty and betrayal are common, and bitter fights over money or the business itself are par for the course. Hiring an experienced business law attorney to protect yourself and your business is a smart move. Our firm can help business partners in the Chicago area breakup and move on with their respective lives and business interests.

In Illinois, the Uniform Partnership Act  805 ILCS 206 provides a default set of rules that business owners must follow when dissolving a partnership. However, many businesses have their own set of rules laid out in their partnership agreements which supersede the RUPA. Figuring out what set of rules applies to your business is the first step to negotiating or litigating an exit.

No matter what rules apply, business partners always have a fiduciary duty of loyalty and care to act in the best interests of the partnership and to engage in “good faith and fair dealing.” A partner who violates these duties will be at a significant disadvantage in the eyes of the court when the business is divided or shut down. It is therefore critical that business partners who are splitting up consult an experienced business law attorney before attempting to exit the business themselves or push out someone else.

Each partner also must be given access to the business’s files and financial records. This ensures that the business’s assets are divided up properly. It can also be used to show that a partner was not upholding the duty of care they owed to the business, as described above. Working with an experienced business law attorney will ensure that your right to see and copy business records is not violated, and will help keep you from violating someone else’s rights and being punished for doing so.

Our experienced business law attorneys help feuding business owners part ways with the people they no longer want to work with while keeping in mind there are other goals and incentives at play. We work with our clients to figure out what their long term goals are, and develop a strategy from there. If this sounds better to you than a long drawn out fight where nobody ends up happy, contact our office to schedule an initial consultation.

 





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