When a business breaks up and owners go their own way, there are many issues to address. You can start the process with these 5 steps:
- Make a list of key business assets,
- Determine current ownership of each asset,
- Determine who wants or needs each asset, and whether ownership or mere use is needed by each party,
- Determine things you may need in the future, and
- Identify things you must avoid or protect against in the future.
With this information, the parties and their attorneys can identify ways to structure the termination and provide the best outcome for each side. With some creativity, there may be work-arounds and other strategies to give one side what it wants or needs while accommodating the needs of the other party. For example, a dispute over a website or domain name might be settled with the use of the existing site as a re-direct to the new websites of each party instead of one side claiming ownership.
There are situations in the future where you may need to cooperate or may want to avoid potential problems. Some common scenarios include:
- Cooperating in signing documents to transfer ownership, registration of rights or protection of business assets and intellectual property,
- Avoiding future copying or improper use of brand name and logo assets. For example, one business owner will want a promise by the other to not adopt a very close business name, logo, or mark that would be confusingly similar,
- Avoiding future opposition of use, registration or enforcement of patents, copyrights, and trademarks.
- Obligation to notify the other of potential infringement of intellectual property of the business by others, or alleged infringement of someone else’s intellectual property by the business.
- Limit or restrict rights of a buyer or transferee if the other later sells or transfers business assets.
Just like you need a business plan to start a business, you need a business plan to end a business or business relationship. Careful planning will avoid problems down the road.