When your business partner announces he or she wants to leave the business, you will either go into panic mode or sigh in relief. Either way, there are a number of concerns and issues that need to be addressed as the business relationship comes to an end.

The first issue, of course, is money.  Will money be exchanging hands?  Will the remaining owners be buying the departing owner’s equity share? If so, on what terms? If the business has debt, especially if personally guaranteed by the departing owner, how will that be handled?

Is all equipment, intellectual property, inventory and other business assets in the business name?  Does anything need to be done to transfer ownership to the business or protect title?

What about future situations? If you are audited or sued in the future, you will want to be sure there is a provision requiring the other party to share records (provide access and/or copies) necessary to respond and defend the legal actions.

What will be the rights of the departing owner with respect to the business’ employees and proprietary information?  Do you have appropriate controls over access to, use of, and dissemination of the business’ data and records?  Can the departing owner remain in contact with employees and other owners?

What arrangements need to be made to transition the business and access to important documents, including account user IDs and passwords.  Don’t forget domain names, websites, and social media accounts that are business related, as well as bank accounts, credit cards and other financial matters.

Is it necessary to inform customers? If so, how will that be handled?

The termination of a business partnership (LLC or corporation) is a complex matter.  With proper guidance, the separation can be a smooth one and attend to all of the important details.  An incomplete or improper separation can lead to disputes, crises and legal fees down the road.  Consulting an attorney is a good idea to mitigate risks and protect rights and interests in this critical transaction.