Corporations splitting up and going their separate ways is not an uncommon event. Whether they may just make a clean break from one another, or one company possibly buys out the other, separation is a usual occurrence in the corporate world. In order for the separation process to be as smooth as possible, there are some considerations that need to be taken, however. To help you decide how best to proceed with your own corporate divorce if this applies to you, we at Kajioka Associates & Attorneys at Law would like to share some insights on what those considerations.
What is a Corporate Divorce?
There are many cases of divorce in the workplace between coworkers, employees, and employers. When an employer breaks up with their contractor or business partner with whom they have a contract, this is a corporate divorce. It is important to know what you can do and what will happen if you do not take any action if in the event you are going to be the one ending your relationship with someone in this way.
Checklist for a Business Partner Break Up
When you have to split up with your business partners, below are some of the things worth considering.
1) Budget. Being a time of great emotion and stress, business divorces can lead to poor decisions in an economic sense when it comes to finances due to the other side may be driven by emotions throughout the process.
Because they find themselves unable to let go or stop trying for something more than what is available under current circumstances, some businesses/individuals end up wasting valuable resources on options with little likelihood of success even if they do realize that their decision is economically irrational before any money has been lost.
2) Goal. Take a day or two and think about your options if you are not sure what to do. It is always best to be well informed before moving forward when facing any big decision like this. Figuring out the general path that will work for both of you going forwards is the most important thing. Depending on how much time you have invested in the relationship so far, as well as other considerations such as whether one party has more power than the other, you need to remember that there are many different paths available.
3) Strategy. Depending on what kinds of goals, budgets, or relationships are most important, the number of options available to you when your company is faced with a lawsuit vary. Maybe getting together as one side in a class action suit could make sense since maintaining the business relationship between stockholders is important but individual owners/ stockholders don’t have much money for litigation.
4) Be Prepared for Anything. You do not have to be one of the people that behave irrationally due to the emotional turmoil and upheaval that goes with a business divorce. An experienced attorney will be able to provide some good advice on how best to proceed when your lawyer has business experience in the type of case you are dealing with. It is usually better to act than just sitting back waiting for things to happen, no matter what happens, and at least if we know about issues ahead of time. When something does go wrong, we can prevent being caught off guard.
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In order to help you get your company on a stable track, contact Kajioka Associates & Attorneys at Law for a consultation with one of our experienced corporate lawyers. We will help you navigate through the corporate divorce.
