I am in a partnership | get me out of here!
If only getting out of a difficult partnership was as easy as it is for celebrities ending their torment in the jungle with the words I’m a celebrity get me out of here. Unfortunately for partners, exiting a partnership is a much trickier path.
In the last year, I have noticed a marked increase in the number of partnership matters dealing with partners trying to exit a business partnership. One of the most commonly cited reasons for wanting out is partners being fed-up with co-partners not pulling their weight. Another commonly cited reason is personal resentment between partners, resulting in the breakdown of the working relationship. I have said it before and I will say it again, partnerships are like marriages and often what starts out as a happy relationship can end in bitterness and acrimony between the parties. Cynical, I know!
So, if your partner is causing you torment and you are desperate to get out, what are your options? If there is a partnership agreement in place setting out the exit process clearly, this can make life considerably easier for everyone involved. Good partnership agreements will spell out how a partner can exit, how the exit is dealt with, how capital and profits are to be allocated upon exit and perhaps post-retirement restrictions on competition.
Without a partnership agreement, things can get pretty tricky. No partnership agreement means parties have to rely upon the default provisions set out in the Partnership Act 1890. This enduring legislation still in force today dictates that in the absence of agreement to the contrary, partners cannot expel fellow partners, prohibits retirement without agreement and dictates that a partnership can be dissolved on notice.
So if your co-partners have become like jungle critters to you, make sure you get legal advice to help you get out of the partnership as efficiently and beneficially as possible.