A business divorce is when two or more business partners decide to end their business relationship. These tend to be most common in the two-owner 50/50 relationship. That is because either party may have the power to deadlock the business, but usually the question comes down to whether the business will continue.
If the business is to continue, then the question becomes: which partner will run it and under what terms. Usually, the feuding co-owners disagree about which direction the business should go or one partner loses interest in the business.
A business dispute may even involve the death of one business owner, resulting in disagreement between the surviving business owner and the estate of a business owner, which is often represented by the deceased owner’s family member.
A business divorce is typically necessary in the case of limited partnerships, limited liability companies, and corporations wherein the business partners can no longer run the business well together. When the documents governing the internal affairs of the company do not provide clear guidance, then the parties need to have a meeting of the minds to determine how to proceed.
Each owner should be represented by a different lawyer. If no agreement is possible to allow the disgruntled business partner to leave the business, then the unhappy owner may petition the court for a dissolution or other recourse for past mismanagement.