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The Business Divorce

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Well, I am motivated to take keyboard in hand once again. A businessman came to see me about his partner, who had simply walked away from their business partnership. He did not care for any of my answers to his questions.
A business partnership is very much like a marriage – perhaps too much. When you hold yourself out to others as a partnership, you tell those third parties that you are together and each partner, just like each spouce, has authority to incur debt on behalf of the partnership. Thus, if one partner runs up alot of debt and then leaves, the other partner also owes the debt – all of it, just like in a marriage. It’s not half yours and half theirs, it is all yours and all theirs too. And if you are the one with the money, you are the one that will be paying the debts. Yes, you can pursue reimbursement from your partner, but unless you chose one that has property or cash, good luck with collecting.
So, just as it is easy to get married and hard to get divorced, it is easy to go into a partnership, but the “divorce” is just as painful. Oh, and as always, a good lawyer can always help.

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