It all started so well. You went into business with a friend or colleague, and for awhile everything was great. But as time went on you realized it wasn't working. Now you want to dissolve the partnership but you're worried it will ruin your friendship. You need to find a way out of the business relationship that doesn't leave you hating each other at the end of the process.
Sounds a lot like ending a marriage, doesn't it? And the fallout of terminating the relationship can be just as acrimonious as a failed marriage. But there are steps you can take to make the transition less painful for both of you.
Hopefully you had the foresight to draw up a Partnership Agreement at the outset. A well written Partnership Agreement will cover how the parties are to proceed if the relationship is terminated, how profits and losses will be allocated and assets distributed, and an option for one partner to carry on the business if the other wants to withdraw. But if you didn't formalize the partnership in writing at startup, you can still formalize the breakup with a Partnership Dissolution Agreement.
It's never wise in business to burn your bridges, so keep a smile on your face, mind your manners, and treat your soon-to-be-ex-partner as you would like to be treated. The more civil you can be during your break-up negotiations, the smoother the transition will be. And it will make your mother proud.
Your lawyer and your accountant should both be involved in the process. After all, that's why you hired them - to give you advice. They're the experts when it comes to the tax and legal implications of dissolving a partnership. They have no emotional attachment to the business, which is a distinct advantage because all breakups - professional as well as personal - are fraught with emotion for the parties involved. You should also hold a formal partners meeting to discuss the dissolution and have an outside third party present to take notes of the proceedings. The presence of outsiders often helps to allow cooler heads to prevail.
Don't be greedy and don't make unreasonable demands. Try to come up with an exit plan that works for everyone. Put the emotions aside (see points #2 and #3 above) and negotiate in good faith.
You would never have gone into partnership with these people unless you felt that your respective skills and talents meshed well. As mentioned above, never burn bridges if you can avoid it. The day may come when you need to call on the skills of an ex-partner for a project, so staying on good terms is essential. So long as you can keep talking, you can work your way through the bad feelings and get to a better place where you both feel more comfortable.
Forget the long drawn-out drama and just cut to the chase as quickly as possible. That way you can all get on with your respective careers in a more positive and productive environment.
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Have you reached a point with your business where it's no longer desirable or feasible to continue operations? So many businesses, large and small, have faced that decision during the COVID-19 pandemic. It's very difficult to consider walking away from something that you have built with your own equity, sweat, love and passion. But if you have reached that crossroads and there is no hope of selling it and no family members or employees willing to take it over, then your only other course of action may be to shut it down, liquidate the assets, and pay your creditors.
Confidentiality agreements, non-disclosure agreements, NDAs, business protection agreements – no matter what you call them, they're an essential part of a company's internal and external contractual structure.
There is no good reason for your business not to use an NDA, and a number of good reasons why you should have at least one NDA template in your corporate toolbox. Many companies have several Non-Disclosure Agreements – one for employees, one for outside contractors, one for suppliers, etc. Let's discuss the top 4 reasons your business needs an NDA.
Reason #1 is an obvious one. You are legally responsible for securing your customers' personal information to ensure that it's not stolen or disclosed, whether accidentally or intentionally. Most countries have adopted privacy laws to protect consumers against fraud, identity theft, and invasion of privacy. A business that fails to comply with those laws can suffer serious consequences.
All employees, managers, and contractors who have access to your customer records should be required to sign a Confidentiality Agreement prohibiting any disclosure of any such information to anyone, including family members. You can choose to incorporate the confidentiality provisions into your standard employment contract, or use a separate agreement or confidentiality pledge form.
You should also adopt a company confidentiality policy that clearly states what the employee's / contractor's obligations are and what their liability will be if they breach the confidentiality provisions. The policy statement should also be distributed to any outside consultants that the company has contracted with, who may receive or have access to confidential information in the course of performing their services.
A competitor could use your financial data to their advantage. So could an ex-employee. A 2014 white paper by Osterman Research revealed that "68% of information workers store work-related information in a personally managed file-sharing solution". And "89% of employees continue to have access to at least one application from their former employer now that they are working for someone else."
A 2021 article by SmallBizGenius.net quotes some alarming employee theft statistics. According to the American Bar Association, "59% of ex-employees admitted to stealing the company's sensitive information when leaving previous jobs".
While requiring your employees and contractors to sign a Non-Disclosure Agreement may not completely protect you from employee theft or fraud, it creates a contractual obligation on their part to protect and not disclose your confidential information, which will continue beyond the term of their employment with you.
If you have a patented process, a unique business model, a "secret formula", or a software application you've developed specifically for your business, this is a valuable trade secret that your competitors would like to get their hands on. Trade secrets and intellectual property are some of your company's most valuable assets. If you used outside consultants (programmers, researchers, and the like) to assist in developing the trade secrets, every one of them should be bound by confidentiality agreements. Likewise everyone inside your organization who has knowledge of the trade secrets should also sign an NDA.
If you're planning to sell your business, potential buyers will want all the information about your operations so they can do their due diligence. If you don't have a confidentiality agreement signed by the buyer before turning over that information, you run the risk of having your data stolen by someone who may just become your next competitor - with your trade secrets in their hands.
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If you operate a small business, you already fill a lot of different roles. Should Accountant / Bookkeeper be one of them? Maybe outsourcing is an option that will work for you. Here are some pros and cons to consider when deciding whether to outsource your accounting functions vs. doing them inhouse.
I just renewed my Canadian passport, and one of the questions on the renewal form was "Are you a naturalized Canadian?" Which started me wondering about what a "naturalized Canadian" is, and what the difference is between naturalization and Canadian citizenship.
Those of us who are lucky enough to have been born and raised in Canada get to enjoy all the rights, privileges and benefits of being citizens of this wonderful country. I believe that I live in the best country in the world. And apparently so do the quarter million new immigrants who arrive in Canada each year.
A naturalized Canadian is someone who has obtained citizenship by means other than being born in Canada or being born to or adopted by Canadian citizens. In other words, a naturalized Canadian is a person who became a permanent resident and then applied for and was granted full citizenship.
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An indemnity bond (also called a surety bond or fidelity bond) is a form of insurance purchased by one party to a contract as a means of compensating a second party to the contract, should the first party fail to deliver on its promises or perform its obligations. The bond is guaranteed by a third party (usually a bank) which agrees to pay the second party if the first party defaults.
There are many scenarios in which an indemnity bond might be required by one or more of the parties to a transaction. For instance, bid bonds are commonly used in situations where projects are offered through a bidding process.
Bid bonds ensure that the successful bidder follows through on the promises set out in its bid. Payment bonds are used extensively in construction projects to guarantee that the general contractor pays all of its subtrades and suppliers, to protect the project owner against exposure to lien claims.
An indemnity bond could be used to avoid double payment by a company redeeming its shares in the event of a lost share certificate, or to indemnify a freight carrier for delivery of a shipment of goods if the bill of lading is lost.
No - these are two different types of obligations. A guarantee (or guaranty) is a promise to pay the indebtedness of a corporation or business if it becomes unable to meet its financial obligations, up to the full amount of the debt. An indemnity is a promise to protect the indemnified party against any losses it may suffer in connection with the transaction, without limit.
No, you can purchase a bond from any financial institution or insurance company. But you should review it with your lawyer so that he/she can explain exactly what the legal implications are.
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As a condo board member, I've been asked on several occasions at AGMs to discuss the benefits of having a professional property management company take over the management of our self-managed condominium. Every unit owner in our building knows that this will mean an increase in our monthly condo fees, but will the benefits make the extra costs worthwhile? Let's look at the pros and cons of hiring a professional management company vs self-management by the condo association.
There's no doubt that hiring a property manager will cost more than having the condo board / HOA manage the project. Monthly condo fees will need to cover those costs, and no unit owner likes to hear that his or her fees are going up. So self management is an attractive option to the owners in general.
However, if you calculate the value of the time the Board members put into looking after condominium issues, it becomes apparent that there's also a large personal cost to these folks that the other owners don't see. Whether or not the project is self-managed, the condo association will still have to hire professionals to handle legal and accounting matters. These are roles the Board members cannot fill themselves unless they have the skills, training and expertise. And even if a Board member is qualified to provide legal or accounting services, the ethics and the legality of such an arrangement would be questionable.
Advantage: Professional management company for expertise and optics
Individuals who serve on condo boards are typically career people who work during the day and must rely heavily on contractors and resident volunteers to take care of situations that arise while they're at work. This can be frustrating to an owner who has a plumbing problem and can't reach the Board members when the problem arises.
In emergency situations when time is of the essence, it's very important for the affected parties to contact plumbers, electricians, or other service people quickly to mitigate the damage as much as possible. This could be difficult in a self-managed scenario if it occurs at a time when all Board members are at work or away (such as over Christmas or a long weekend - we had just such an instance during my last stint on my condo board). That's when a professional property manager, with a 24/7 emergency line, is ideal. Owners have more peace of mind knowing that no matter what happens, they'll be able to reach someone to deal with the problem - day or night, 365 days a year.
Advantage: Professional management company.
Managing a condo or strata sometimes means acting as a collection agency, an enforcer, or an arbitration panel. Imagine having to levy a fine against one of your neighbors because they've violated the Bylaws, or calling the police to deal with a noise complaint or (worst case scenario) to break up a domestic dispute. Those are all situations that our condo board has had to deal with on more than one occasion.
If the sanction is coming from one of your neighbors instead of a third party management company, it's much more personal and is more likely to result in a strained relationship between the parties, if not an outright rift. It's also stressful for the Board members when they have to deal with unpleasant matters like collecting overdue fees and assessments or issuing warnings to fellow owners over infractions. A property management company can handle these situations in an impersonal and detached manner, which allows the Board to maintain a neighborly relationship with the other owners.
Advantage: Professional management company.
A self managed building relies heavily on its volunteers. Getting other owners involved in running the condominium creates a deeper sense of community and instills an even greater pride of ownership among the unit owners. The people in our building routinely volunteer to look after flower beds, help out with sanding of the parkade ramp in winter, run the trash compactor, and sort recyclables. A condo management firm does not have the same relationship with the owners that the Board members do, and in a self managed condo the Board has the opportunity to solicit help and support from other unit owners in a way that an outside management company could not accomplish.
Advantage: Self management.
Designing critical elements of training before you sell franchises is essential if your franchisees are to succeed. Not only will effective training contribute to your brand’s quality and consistency, prospective franchisees are impressed when they see you’ve committed to robust training throughout the organization.
Are you in the process of registered a trade mark? Do you know which trade mark symbol to use at each stage of the process in connection with the trade mark?
