A general partnership means that there is more than one owner of a business. Essentially, partners share in the profits and the debts of the daily workings of the business. Because of that, when one partner wants to sell, they cannot sell the entire business. They can only sell their assets – i.e., their share of the partnership. If you are hoping to sell your share of a partnership, consider these 6 important steps.
Step 1: Review the partnership agreement which outlines how partners would address certain business situations, such as selling. The key to a seamless selling process is to not deviate from what was already agreed upon.
Step 2: Meet with your partner(s) in order to take a vote on how to dissolve the partnership and sell your assets. In moments of confusion or doubt, always consult state law on dissolving a business or partnership.
Step 3: Because assets can be both tangible and intangible, the next step is to determine which ones are to be sold. In a case where only a part of the partnership will be dissolved and the business intends to remain intact, the remaining partner may not wish to sell their mailing list or machinery.
Step 4: Pay off all debts. If that is not possible, reduce the value of the selling partner’s shares to reflect the percentage of debt the selling partner should assume.
Step 5: Consult a business advisor and perform a business valuation. Before you can sell any kind of business, you need to determine what it is worth.
Step 6: Find the right buyer! Once you have a business advisor and a valuation, you can sift through potential buyers to find the right one. Transworld Business Advisors has a network of pre-vetted buyers which makes the process that much more seamless.
If you are hoping to sell your share of a business, contact your local Transworld Business Advisors to ensure you have everything in order.