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Starting a Business

What Ownership Stake Should a Departing Partner Keep?

Guest Writer
Entrepreneur, Business Planner and Angel Investor
min read
Opinions expressed by Entrepreneur contributors are their own.
There is nothing in this realm even remotely as simple as standard practice. There are no simple formulas. This will be a matter of what you and your partner can negotiate.

Your question is a great example of why so many experts recommend planning for the break-up of a partnership before you actually start the partnership. These plans are called buy-sell agreements, which can help preserve the continuity of business ownership and to ensure that the partners are treated fairly, as well as any new partners.

These agreements work only when you agree on a formula before there are problems, before somebody needs to go.

Now, however, you're stuck with negotiation. Find a good attorney, or perhaps a mediator who works with an attorney you both trust. You're going to have to work it out. Look for expertise and experience in small business and your type of industry.

Related: Exit Strategies for Your Business
Related: A Guide to Building an Exit Strategy

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