Sometimes, businesses simply have to wind-up or require new operating agreements (or articles of incorporation) because key players are moving too far away to keep playing an active role in running the enterprise. Other times, someone chooses to retire, a new major partner wishes to join with the others – or someone simply passes away unexpectedly. Of course, a great many other businesses break apart part due to major differences between the ruling parties of the company -- or due to some type of corporate malfeasance.
Whatever the cause may be, you should always try to remain on friendly terms with all of the other parties – and conclude the winding-up process as quickly and efficiently as possible. As one article states, “The challenge is making the [business] divorce quick and relatively painless.” Hopefully, your operating agreement sets forth a break-up plan that is “rational, neutral, and unemotional.”
The Key Issues You Must Bear in Mind While Your Business Winds Down
Just about everyone's feelings are hurt. When people are in this mood, they are often behave irrationally and speak out about the break-up (just like they might during a personal divorce) in a manner that could prove harmful to everyone’s professional future. Make sure everyone sits down and at least agrees to keep the “core” reasons for the breakup private – unless someone has broken the law and litigation is certain. Even then, each member of the firm should try to avoid revealing any more private business information than is absolutely necessary to volunteer during such proceedings;
You need to review the situation as objectively as possible. Unless there is striking proof to the contrary, try not to take what’s happening too personally. Failing to do this will tempt you to behave in a possibly vengeful fashion. Try as hard as you can to recognize why the breakup is truly occurring – and realize it's probably harming everyone to some extent;
People can and do change. While we all meet individuals who miraculously behave in rather positive ways throughout their lives, they're probably the exception and definitely not the rule. Point being -- one or more of your partners (or members of the firm) could be going through a divorce or facing financial ruin for reasons unfamiliar to you. Some people really do “break” under such circumstances. Likewise, other people can change and becoming excessively greedy or controlling – also often due to outside forces you may never be able to see -- much less understand.
Whatever you do, don't panic. Also, try to hold regular meetings throughout the dissolution process and at least partially forgive those you may have reason to believe are treating you a bit unfairly. Just do what's truly necessary to safeguard your rights and interests – and look forward to a better business future without those present whose behavior may well have helped ruin or even destroy the company.
To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.