Partnership Dissolution

We’ve written about succession planning, buying a business, and selling a business, and the importance of securing an accurate business valuation or asset appraisal in all of these scenarios. But what should you do in a partnership situation if one partner wants to sell and the other doesn’t? In this scenario, things can get a little more complicated.

Typically, if one business partner wants to sell and the other doesn’t, the partner who wants to stay in the business must buy out the other partner. The easiest way to handle this situation is to have written documents in place spelling out the circumstances under which a buyout can occur. These documents should be written when a partnership is formed, long before either partner would even consider leaving the business. But if these documents do not exist, there are still ways to handle this delicate situation effectively.

The first step is to determine the net value of the business. This includes all physical assets, like real estate or equipment, and all soft assets, like trademarks or business reputation. Also included in a business’s net worth are profits, as well as any outstanding debts or invoices. Determining the business’s net worth will help the partners decide, ideally through an intermediary, what to offer the partner leaving the business and how much money the remaining partner will need to raise in order to complete the buyout.

After the net value is determined, the partners can discuss the details of the transaction and make sure that their plan is feasible. In many cases, because this scenario can be difficult and emotional, it is best to hire a lawyer or a mediation professional to help in the process.

By: Present Value

Additional reading:

Succession Plans

Buying a Business? Make Sure to Do Your Homework

Tags: Business Valuation, equipment appraisal, equipment appraiser, machinery appraisal, machinery appraiser, partnership dissolution
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Freeing Up Much-Needed Cash

When we’ve discussed online auctions in the past, we’ve typically talked about them as a simple way to sell machinery or equipment when a business fails. But what if your business isn’t failing? Maybe you’ve experienced a bit of a slowdown – and if you have you’re not alone – but are still holding strong. The local news station in Terra Haute, Indiana, described this type of situation yesterday in their article, “Terra Haute Airport Gains from Online Auction.” 

The airport had several planes that it used for flight instruction, but noticed that enrollment was dwindling. Rather than let these unused planes sit on the ground gathering dust, the airport decided to engage in an online auction to sell the planes, free up some cash, pay down debt, and help the airport thrive. Four planes have been sold so far, and not only has the airport been able to pay down debt, it’s saved thousands in insurance and maintenance costs. Seems like a smart move. 

If this is a move your business may consider, contact Present Value. Our certified machinery and equipment appraisers will appraise your company’s assets and facilitate the auction process by acting as liaison between you and one of the two auction houses with which we partner. Give us a call, and we’d be happy to help you explore your options.

By: Present Value

Additional reading:

Machinery and Equipment Auctions

Equipment Auctions

Tags: equipment appraisal, equipment appraiser, machinery appraisal, machinery appraiser, Online auction
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