A business partnership may allow someone without adequate capital to start a business more quickly than they would be able to otherwise. A partner can connect someone with key players in a local industry or business management experience when all they have is a fresh business concept. Partners can potentially run a business together for years, but they may eventually find that working together has become unreasonably difficult.

Sometimes, one partner may choose to acquire the other’s interest in the company through a partnership buyout. The following are some of the most common reasons why one business partner may seek to acquire the other’s interest in the organization that they started together.

Issues with misconduct

One of the most common reasons that someone wants to buy out their partner is a lack of trust in their relationship. If a partner has embezzled, funneled money toward a spouse’s business or otherwise made choices that benefited them rather than the organization, that misconduct could affect the partnership relationship and the business itself. Documented issues with partner misconduct may lead one partner to attempt to purchase the interest of the other to preserve the company and secure control over the organization.

Concerns about job performance

Sometimes, both partners enter the relationship in good faith and do not engage in any overt misconduct. However, one partner might still fail to meet certain necessary standards for their work performance. Committing fewer than 40 hours a week to their job, closing fewer sales than they used to or making mistakes due to negligence or distraction could all be issues that might lead to one partner wanting to buy out the other.

Differing goals for the company

Perhaps the partners initially started the company with the intention of working there until they were both retirement age. However, one may have since developed a passion for a completely different project. Buying out the disinterested partner could be a smart move on the part of the partner still intent on operating a thriving organization. When partners no longer agree on how they should run the company or what the long-term plan for the organization is, one partner may decide they want to buy out the others.

Negotiating a partnership buyout can be a complex process that requires a business valuation and a thorough contract review. Business partners who recognize when a buyout may be beneficial can potentially preserve the company they started and the investment they made in it.