How to Buy Out a Business Partner

Video Transcript

"OK. So, how do you buy out a business partner? Well, if you have a business partner, you're running a business together, first thing to do is really just kind of go back and make sure you can do a good evaluation of the business. You can find out what the business is worth. And many times with a partner, if it's just an even partnership, 50/50, you will naturally own or have fifty percent of the value of the value of the company under your name. What you need to do is to be able to find the financing or the investment money to purchase the other fifty percent from your partner. And really, buying out a business partner, it's something where you'll want to bring in legal counsel. You want to make sure that everything is legal, that there's not going to be any recourse or reversal of decisions that are made. And you also want to make sure that you've got the right people in there to calculate things like the tax liabilities, because you don't just want to look at the value of the business. You also want to look at what the liabilities are. And all of those things should come together and give you a solid price. That's usually we're talking about a dollar amount where you can purchase the rest of the business from that partner. And sometimes this is a very good arrangement. People have different ambitions over a period of time, and you'll have one partner wants to continue with the business and has visions for that. And you might have another partner that the best thing for them to do would be bought out of the business and they can take those assets and start a different business, something that they've got an ambition to pursue."