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Do business partners need mediation during dissolution?

On Behalf of | Dec 5, 2023 | Mediation

If you and your business partner wish to dissolve the partnership because the market has changed, you/they are retiring, you/your partner has a change in personal/business goals or the partnership term has expired, you can do so with the help of a mediator.

But why do you need one if the partnership is ending?

To determine the reason for the dissolution

Chances are you and your business partner know why you want to dissolve the partnership. But if you don’t (possibly they only told you they want to exit), you should consider the presence of a mediator when having a conversation with them to avoid further misunderstandings.

The mediator will encourage them to explain why they want to exit clearly. When you know the specific reasons for the dissolution, you can identify the issues that you need to resolve.

To help with unresolved issues

You and your business partner may have unresolved issues during dissolution. For example, you can disagree on asset distribution or whether the business should continue after the dissolution. A mediator can help you solve such issues.

With their experience and guidance, you can settle all your affairs before the dissolution – they can help you reach a mutual understanding of the partnership’s assets and liabilities or help you determine if and how the business can continue after the dissolution.

Once you have reached an understanding it’s crucial to draft an agreement. You need to ensure you both understand the terms of the agreement before signing it and that your dissolution contract is in accordance with the state’s laws.

Learning more about how to end a professional relationship via mediation can help you to protect your personal one in the process.