Legendary Sir Paul McCartney recently told the BBC that it was John Lennon who asked for a “divorce” of the Beatles. McCartney was left with the task of petitioning the court to dissolve the business partnership that was “The Beatles,” which gave him the unfortunate reputation of being the Beatle who broke up one of the most beloved music groups of all time. This reputation, says McCarthy, frustrated him for the past 50 years.
The Beatles’ partnership agreement was 2-3 paragraphs long, written on a single sheet of paper. McCartney’s lawsuit finally settled after four years, with the parties reducing their agreement to an 87-page settlement agreement. What started out as a simple agreement between good friends became a protracted battle in the courts.
Business breakups, big and small, can be emotionally and financially taxing. Help prevent this stress by:
- Enter an operating or partnership agreement with all members/partners at the start of the business enterprise.
- Keep track of how much money and sweat equity each member/partner is contributing.
- Create triggering events for termination of the business and buyouts of each other’s interests.
- Create a means to easily value the business for purposes of a buyout.
- Put non-compete agreements and non-disclosure agreements in place between members/partners.
- Create agreements on who owns real and personal property of the business, intellectual property (e.g. trademarks and copyrights), and proprietary information (e.g. client lists, proprietary processes, etc.) upon dissolution of the business.
- Consult with an experienced business attorney at the formation of the business.
An experienced business attorney can guide you and your business through all stages of the business life cycle. If you are starting a business, or experiencing a business breakdown, contact one of our business attorneys for a consultation.