My business partner and I have been running a small manufacturing company for about 12 years. I want to retire and sell my share, but he's completely against selling to an outside buyer. He says he'd rather keep things as they are. I'm worried I'll be stuck forever. Is there any way to sell my portion when he won't agree?
Partnership
Can I sell my business if my partner doesn't want to?
Depends on your operating agreement. Most partnerships have buy-sell provisions that cover this. If yours doesn’t, you might be in for a rough ride.
I went through something similar. In my case, the partnership agreement said any sale of more than 25% needed unanimous consent. So I couldn’t sell to a third party unless my partner agreed. Check your documents first.
What does your lawyer say? If there’s no buy-sell, you might have to dissolve the whole thing and split the the assets. That usually forces a negotiation.
Dissolution is extreme. Might be better to offer him a payment plan to buy you out over time. He keeps the business, you get your money.
Can you sell just your Shares? In some states, a shareholder can sell to anyone unless the agreement says otherwise, but the buyer becomes a minority owner with no control. That might not be attractive to a buyer though.
PlainsWalker makes a good point. I looked into selling my minority stake once. Buyers wanted a discount because they’d have no say. In the end, my partner bought me out at a lower price than I wanted, but it was cleaner.
You might also look at a mediation clause. Some agreements require mediation before any legal action. If yours does, you could bring in a neutral third party to help negotiate a buyout. It’s often cheaper than litigation.
Another angle: if you can’t sell, could you just stop working? If you’re not drawing a salary, you might force his hand. But that’s Risky if the business needs you.
I’d get a business attorney to review everything before you do anything. This is not do-it-yourself territory. Good luck.