Going into a business with a friend is like alchemy. If the recipe is nice and the ingredients augur well with each other, the thing may just pan out. If not, you risk ruining your friendship and burning the business to the ground. Businesses co-founded by friends have mixed success at best. Some manage to get through their garage-start-up phase. Others aren’t half as lucky and end up breaking up.

As friends, you definitely know and understand each other without words. You have the same interests and preach similar life philosophies. However, a wonderful friendship, even one that has evolved through years of thick and thin, is not necessarily a guarantee of business success.

In his 2012 book, The Founder’s Dilemma, Professor Noam Wasserman noted a correlation in the composition of start-up founding teams. He expressed that groups of friends and relatives are the least likely to stick together, with each social connection increasing the chance of a cofounder leaving the company by 30 percent.

Indeed, that report has proven to be true, as business partnerships between friends or family won’t always be sunshine and rainbows. Even if both of you start with nothing but a positive attitude, the rainy days will definitely come, and how you resolve it will dictate the life span of the business.

These days, the line that separates business and personal life is blurry at best. But when friends decide to invest time and resources into building a company, the line vanishes into thin air. Delicate, personal matters that you normally keep under wraps will show themselves in the office.

After all, your best friend is privy to the things that happen in your personal life, so there’s no point pretending they don’t affect the work. And note that when they do, you are more likely to falter and make poor business decisions.

Once you become bosses of your own company, you will more or less notice a change in the dynamics of your relationship. Almost every work will become a staple in daily conversations. It will filter into chill hours and your buddy won’t be just your buddy anymore.

Have it in mind that it doesn’t necessarily have to be a turn for the worse, but you should consider that possibility in your calculations. Can you take steps to compartmentalize? Are you ready to put your friendship at stake to make the business a priority? What if something goes wrong and you lose both the business and your friend?

A good number of people believe that having a plan B is like preparing to fail before you even start. But the truth is a contingency plan can help preserve your friendship, or at least let you break up in a civilized manner when the business starts flat-lining.

Your exit strategy should detail what will happen to company assets, the percentage each of you gets paid upon separation, and what happens to clients. Are you going to continue on your own or close up shop for good? What happens to the intellectual property after separation?

5 Steps to Ending a Business Partnership With a Friend Without Ruining the Relationship

Agreeably, breaking up can be very challenging, especially for business partners who are also friends. But there are ways to end a business partnership without ruining the relationship. Have it in mind that it takes primarily communication and a lot of understanding, but it can be done.

  1. Note the Signs Before it is Too Late

The loss of faith and desire to end a business does not come overnight. It is known to build up over time, with small signs turning into big red flags. Left unchecked, these little oversights can reach a boiling point, turning the best of relationships into the worst.

Therefore, to avoid that and to help ensure an amicable breakup, you need to spot the signs of your failing business partnership before it reaches a toxic breaking point. One of the more noticeable signs is when your partner’s work habits change. If your business partner suddenly starts slacking off or is not offering the business his or her all, it could be a red flag that something is not right.

Note that nothing turns a business partnership sour quicker than if one person thinks that they are doing all the work while the other is not. Howbeit, to salvage the relationship, keep the dialogue going—that is, listening as well as talking.

Meanwhile, to efficiently preserve your business partnership, consider approaching your partner and seeing if something is up. Note that if you leave this sign alone, it could make things a lot worse when you do decide to dissolve the business. By that point, there’s often a lot of pent-up resentment and frustration.

Another tell-tale sign the business partnership is becoming unfavorable is if you and your partner find yourselves in heated arguments about the direction of the organization. Yes, debating is ideal for business success, but unresolved conflicts can make it much harder to sell a business, which is why it is necessary not to let things like that fester—especially if you care about remaining friends.

  1. Always Make a Fast, Clear, and Decisive Break

Note that just like bad marriages can take time to dissolve, the same can be said about a business partnership. However, never ignore tensions, disputes, and outright arguments, or brush it off as too much time spent together. You may feel that your bickering is healthy, but if it goes on for a long time, it can negatively affect your relationship as friends and as business partners. That is why it is important to make a clean and quick break.

Try not to spend months debating if you should remain business partners or if the business should be sold or one partner buys the other one out. When you reach the point of no return, you must eradicate any feelings of hurt, frustration, and resentment while trying to dissolve the business.

Have it in mind that breaking up with a business partner is emotional and can even be tougher than a divorce. But it is very crucial not to let negative feelings come into discussions. The last thing you want to do is attack your business partner and expect to spend the holidays together later in the year.

  1. Ensure a Healthy Dialogue

Once a business partnership goes sour, it is more or less the result of a breakdown in communication between the partners. Nonetheless, to salvage the relationship, keep the dialogue healthy and going—that is, listening as well as talking.

When resentment and anger have poisoned the friendship, it is quite daunting to hear what the other person is saying. But truly listening and continuing the dialogue through the entire process can go a long way in preserving the friendship.

However, to avoid miscommunication, be explicit about what you want from the breakup process. If staying friends is the most important goal, communicate that. If making the most money off the business is the objective that needs to be communicated as well.

  1. Be Reasonable

If you intend to maintain a friendship once your business partnership is over, it is going to require both parties to be reasonable in understanding the best possible way to walk away. Without that and the willingness to compromise, you are more or less likely to say goodbye to the relationship and hello to a contentious, and perhaps ugly, breakup.

Note that this may require giving up a little more than you wanted, but the goal is to ultimately let go and move on as quickly as possible while keeping the friendship intact. If the process is long and drawn out with quibbles over every detail, it may mean the end of your relationship in addition to that of the business.

  1. Seek the Help of Experts

Always remember that even the best negotiations require a third party. For two partners who want to sustain their friendship, seeking help from an independent expert can go a long way in achieving that goal. Have it in mind that a person without a stake in the business can provide objective advice, which can help limit arguments and resentment. (Even calling in help when the relationship is souring can help prevent irreparable damage in the future).

Howbeit, when seeking outside help, choosing someone both partners can trust is important. Consider contacting a business mediator, business coach, or accountant, but try not to contact a lawyer. Because as soon as you do that, your partner may take that as a signal that your relationship is over.


Ending a partnership business can be difficult, especially if your partner is also a friend. There are good and bad ways to handle dissolving the business while preserving your friendship. To cushion some of the blow and preserve the friendship, make sure you are communicating throughout the process. That requires talking a lot, recognizing that it is emotional without letting those emotions get in the way, and being reasonable in the negotiations.

Frequently Asked Questions

1. How Do You Tell A Friend You Are Quitting Your Business Partnership?

Kindly start with acknowledging their contribution and demonstrate your appreciation. Then lay out your vision and talk with them about the disconnect. Then finally, tell them you’ve thought about it deeply and you think ending the partnership is the best way for both of you to move forward.

  1. How Can You Form A Partnership With A Friend For A Business?

The following are some guidelines to form a partnership with a friend for a business;

  • Separate work from play
  • Celebrate small victories
  • Set expectations and goals
  • Get everything in writing
  • Don’t let money become an issue
  • Define roles based on each of your strengths
  • Make sure you’re compatible as business partners
3. What Is The Best Way To End A Business Relationship With A Friend?

Here are some tips you need to amicably end a business relationship with a friend;

  • Always make a fast, clear, and decisive break
  • Note the signs before it is too late
  • Ensure a healthy dialogue
  • Seek the help of experts
  • Be reasonable
4. How Do You Break Away From A Business Partner But Keep A Friendship Strong And Continue To Do Business Alone?
  • Get clear on what you want out of it
  • Look at your partnership agreement and the business.
  • Create a legally binding agreement for the breakup
  • Go your separate ways
5. How Do You Determine If A Friend Would Be A Committed Business Partner Or Not?

The following are some signs to determine if a friend would be a committed business partner or not;

  • Passion
  • Reliability
  • Compatibility
  • Creativity
  • Open-mindedness
  • Fiscal responsibility
  • The ability to build strong relationships
6. How Do You Run A Business With A Friend Without Ruining Your Friendship?

Here are some possible tips on how to run a business with a friend without ruining the friendship;

  • Honestly vet each other
  • Have a short-term memory
  • Make sure you’re both invested financially
  • Make your friendship an asset, not an obstacle
  • Divide up control and decision-making clearly and fairly
7. When Should You Get Out Of A Business Partnership?

Limited partners may withdraw from a partnership in the manner allowed by the partnership agreement, or state law if there is no agreement. In states that follow the Revised Uniform Limited Partnership Act (RULPA), a limited partner has the right to withdraw after six months’ notice to all the general partners.

8. What Happens If A Partner Wants To Leave The Partnership?

When one partner wants to leave the partnership, the partnership generally gets dissolved. And this dissolution means the partners must fulfill any remaining business obligations, pay off all debts, and then divide any assets and profits among themselves. Note that, your partners may not want to dissolve the partnership because of your departure.

9. What Happens When A Partner Leaves The Business Or Dies?

When a partner dies, the deceased’s estate takes over their share of the partnership.

10. What Does A Managing Partner Do In A Business Partnership?

A managing partner is responsible for guiding a business’s strategic direction and also managing day-to-day activities. He usually has a stake in the company. He maintains positive client relationships and drives new business acquisitions, developing and implementing organizational goals, procedures, and policies.

11. How Do I Remove Myself From A Business Partnership?

Consider these simple tips on how you can remove yourself from partnership business;

  • Dissolve your business. If there is no language in your operating agreement stating otherwise, this will be your only name removal option
  • Use a doing business as (DBA) name
  • Change your business’s name
12. How Do You Tell Your Business Partner That You Want To Quit And Start A New Life?

Start with a “Thank you”. Acknowledge their contribution and demonstrate your appreciation. Then lay out your vision and talk with them about the disconnect. Finally, tell them you’ve thought about it deeply and you think ending the partnership is the best way for both of you to move forward.

13. How Do You Kindly Reject A Good Friend’s Job Offer To Help Him Run His Business?

Here are some possible tips to reject a business offer from a close friend;

  • Choose a comfortable medium to communicate
  • Start With a (Thank you)
  • Clearly state your rejection
  • Provide a recommendation
  • Express your desire to keep in touch
  • Give a brief (Honest) reason for turning down the job
14. How Do You Dissolve A Business Partnership Without An Agreement?

The following are the possible tips to dissolve a business partnership without an agreement;

  • Notify everyone
  • Wind up the partnership
  • Review the written agreements
  • Consult a partnership attorney
  • Negotiate a separation agreement
  • Address unresolved matters in court
  • Discuss dissolution with your partners
15. What Happens When That Business Partnership Fails?

If a business partnership fails, or if the partner does not keep his agreement, you must be prepared for a change in business status. You may decide to close the doors, sell the business, sell your share to the partner, buy him out, or any other option that will allow you to move forward with your own plan.

16. How Do You Know When To Call It Quits In A Business, Idea Chase, Or Partnership?

Here are some factors that may lead you to want to quit a partnership business;

  • If the core intellectual property of your company is owned by another person or company that you don’t control
  • If you’ve been unable to find a fit for your product within the market, even after pivoting
  • If you have legal issues
17. Do Partnerships Have To Be Equal?

Partner equity does not necessarily involve equal cash contributions from each partner. Instead, partners may make equal contributions to the business and have equal ownership rights, but the contributions themselves may take several different forms.

18. Can You Sue A Business Partner For Abandonment?

Yes! In the case of abandonment, you could sue your business partner if their departure is a breach of the partnership agreement you had.

19. Can A Partner Sell Without Your Consent?

No! If your business is a limited liability company or general partnership, your partner can’t sell the company without your consent. He may, however, sell his interest in the company if you don’t have a buy-sell agreement.

20. Can A Partner Be Removed From A Partnership?

Probably not possible. Unless the troubled partner agrees, you cannot legally remove him from the joint business account. As long as his name is on the account, he has full access to its funds.

21. What Can You Sue A Business Partner For?

Here are some facts to sue a business partner;

  • If your business partner engaged in fraud or theft
  • If your business partner breached his fiduciary duty
  • If your business partner violates any contractual agreements you have
  • If your business partner violates your intellectual property rights
22. How Do You End A Partnership?

To end a partnership agreement, consider the following tips;

  • Dissolution by notice
  • Death or bankruptcy
  • By agreement
  • By expiration
  • By the court
23. What Should I Include In A Business Partnership Agreement?

In a business partnership agreement, the following are to be included;

  • Allocation of profits, losses, and draws
  • Contributions to the partnership
  • Withdrawal or death of a partner
  • Partnership decision-making
  • Name of the partnership
  • Admitting new partners
  • Partners’ authority
  • Management duties
24. Will Quitting A Business Partnership Affect Your Future Partnerships Or Your Career?


25. Which Specific Roles And Responsibilities Should Each Business Partner Assume?
  • Managing employees
  • Tracking financial objectives
  • Developing client relationships
  • Implementing marketing strategies
  • Executing other strategic management activities
26. Do All Partners Have To Agree To Dissolve A Partnership?

Of course yes! The partners must comply with the agreement. Usually, there is a clause in the partnership agreement requiring less than a 100% vote to dissolve the partnership. If there isn’t such a clause, then all partners, unanimously, at the same time, must agree to dissolve the partnership.

27. How Do Business Partners Deal With Problems?

Here are some strategies you need to deal with problems with business partners;

  • Plan ahead when possible, and stop fights before they start
  • Have an active listening Session
  • Don’t rush to judgment
28. What Legal Steps Does It Take To Implement A Partnership?

Listed below are the legal steps you need to implement a partnership business;

  • Obtain insurance
  • Choose a business name
  • Register a fictitious business name
  • Draft and sign a partnership agreement
  • Comply with tax and regulatory requirements
29. What Happens To Profits In A Partnership?

In a partnership business, profits and losses are passed through to the partners as specified in the partnership agreement. So if left unspecified, profits and losses are shared equally among the partners.

30. What If There Is No Partnership Agreement?

If there is no written partnership agreement, partners are not allowed to draw a salary. Instead, they share the profits and losses in the business equally. The agreement outlines the rights, responsibilities, and duties each partner has to the company and each other.

31. How Do You Dissolve A 5050 Business Partnership?

To dissolve a 5050 business partnership, you’ll have to file a dissolution of the partnership in the state your company is based in to end the partnership and make it public formally. Doing this makes it evident that you are no longer in the partnership or held liable for its debts.

32. How Is Partnership Buyout Calculated?

Partnership buyout is calculated by multiplying the percentage of ownership by the appraised value of the business to determine the amount necessary to buy your partner’s share. For example is, if your partner owns 25 percent of a business that appraised for $1 million, the value of your partner’s share is $250,000.