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Is it too early to plan to dissolve your business?

One of the more difficult topics for anyone involved in a business to consider is the end of their business. Or, at least, the end of the founder or one of the principal's involvement in the business. When you are just getting started, the focus is all about getting the operation off the ground. You are so busy in most new businesses or start-ups, that the days fly by and you can barely keep track of tomorrow's activities, let alone worry about years or decades in the future.

But you should. The irony is that it is far easier to make, cool, dispassionate and reasoned decisions on how to dissolve a business or aspects of that dissolution when the only problems are growing the business.

The company may have few assets and fewer investors. There may be only a few individuals involved at the beginning, and they are all working together and on the same page. This limits the hidden agendas, conflicts of interest and promotes honesty and transparency.

As part of the foundational documents of your partnership, limited liability company or corporation, you should have plans in place that will dictate how a partner, member or shareholder may be bought out. A thorough buy-sell agreement will control how all of this occurs.

This sets the right expectations at a time when no one is thinking about selling an interest or leaving the business. But life and death happen. Partners become divorced, suffer devastating medical conditions or die unexpectedly in car accidents or when their airplane crashes.

Have a clear and straightforward process in place will help prevent misunderstanding, disagreements and differences of opinion from becoming nasty litigation that can cause the failure of the business.

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