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Buying out a partner? Don't make these mistakes

If you run a business, one of the things you might be interested in doing is buying out your partner. Maybe the partner isn't interested in continuing on, or you would prefer to take over as the sole owner. Either way, you'll need to look into buying out your partner.

Before you do, it's a good idea to consult with someone who is experienced in acquisitions. Your attorney can help you understand partnership laws and terms that could alter the options you have. Even if you're on good terms with your partner, you should work with your attorney to complete the transfer and buyout properly.

What shouldn't you do if you plan to buy out a partner?

Don't approach as if you're cutting them out and start speaking in legalese. This is someone you've worked with, and a solid heart-to-heart conversation is likely to go further than if you present legal documents right away. This exchange could be amicable, but one wrong move could also turn it into a sour transaction. Be cautious about how you approach your partner, so this doesn't become a negative, harmful situation.

Another thing to avoid is getting caught up on valuation. There's no easy way to value a business, so it's a good idea to try to meet your partner halfway when it comes to what they want. Even if you think the business is worth less, the business isn't worth less to them. Think it through carefully during negotiations until you can get an agreement that works out for the best for both of you.

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