Starting your own business can be difficult and stressful, and running that business can be even more so. However, breaking up a business and wrapping up its affairs can be difficult in its own way, if you’re not appropriately prepared. However, how hard it is can depend on how your business is organized, and how many other people own the company you’re trying to break up.
If you’re the sole owner of your business, breaking it up is a relatively simple matter. First, you need to wind up all your existing business and fulfill any legal obligations, including paying off any debts you might owe. Second, you’ll need to close any business locations you have open and get rid of your business assets, such as your remaining stock or equipment (any that remain after fulfilling your debts, anyway), as well as close down any bank accounts and lines of credit that you created for the business. Third, you will need to make appropriate filings with the state where your business is registered, to notify the state of your business’ closing, as well as fulfill any extant tax obligations.
However, if you have any business partners who also have a stake in the business, wrapping up operations will require further steps to split up the company’s remaining assets and, possibly, debts. Ideally, you’ll have put terms for closing the business into the document that formed your company, such as a partnership agreement or articles of incorporation. Otherwise, you should have made a separation agreement with your other business partners at some point in the business’ operation. If you haven’t, you’ll either need to follow the default statutory requirements for breaking up your business, or you’ll need to negotiate the terms of separation while it’s happening.
It probably wouldn’t surprise you that the process for negotiating a company breakup is often referred to as a “business divorce,” and it’s roughly as pleasant as the name implies. Everyone who owns a portion of a business as a right to at least some of the company’s profits and assets, after all, and they will fight for every bit of it that they can. This process can be difficult, both financially and emotionally, but it can go much smoother so long as you negotiate the terms for the breakup before it becomes an imminent issue.
Fortunately, if you find yourself looking to break up your business or split up with your business partners, you can look to the experienced guidance of the business law attorneys at Blodnick, Fazio and Clark. The commercial litigation attorneys at Blodnick, Fazio & Clark are skilled and knowledgeable in the area of business law and commercial transactions. With an office conveniently located in Garden City, Nassau County, and Babylon in Suffolk County, the firm provides high-quality legal care at reasonable prices. If you require legal assistance concerning antitrust litigation, dissolution of a business, protecting your business from divorce, or another commercial litigation matter, call (516) 280-7105 or fill out our contact form for a free consultation.