Attorney Michael Campbell Explains Why The Resolution In A Business Partnership Breakup Is Like A Divorce!
Buying out a deadweight partner works like a divorce, explains Pierce County, Washington attorney Michael Campbell. If the company's value has climbed, you're generally stuck paying his share at present market value—he benefits from your work—unless you acted when the problem first arose. As in family law, the outcome reflects the situation when the judge rules, not years earlier.
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Answered by Michael Campbell · Pierce County, WA
Highlights
Frequently Asked Questions
Why is a partnership buyout like a divorce?
Because a slacking partner may still share in gains he didn't earn—if the company's value has climbed, you're generally stuck paying his share at present market value.
When does one partner move to exit?
When the relationship breaks down enough that one partner finally moves to 'divorce' the others and force a buyout.
When does a court value the business?
As of the decision day, not the filing day—so, as in family law, the outcome reflects the situation when the judge rules, not years earlier.
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