Going into business with someone else can be exciting, and there is much to like about new business ventures. The biggest issue, in our view, , is what happens if things go sideways? How do you get your money, your hard work, and your blood sweat and tears out of the business?
There are a number of options to exit a business:
Courts
If you have no agreement you may need to have the courts decide how you exit the corporation, how assets are divided and how debts are repaid. This can be expensive.
Sale Mechanisms
Sometimes Shareholder and Partnership Agreements contain mechanisms within them that spell out how you get your value out of the company and on what terms you exit. Things like shotgun agreements, drag along and tag along, and types of options can fall under this category.
Negotiation
Good old fashioned negotiation with the other side can lead to a reasonable solution sometimes.
If you require assistance in exiting a company, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.
