Separate your former partner company roles before agreeing an exit
Map distinct company roles of a former partner before documenting a separation-related business exit.
Corporate Recovery Partners
01 / 06
Leaving the relationship does not describe the company change
Your former partner says they are leaving the business. That statement may concern day-to-day work, share ownership, a director position or several roles at once. Obtain appropriate legal advice before treating the announcement as a completed corporate exit. Each role needs to be identified from the actual records and addressed through the proper process.
Imagine former partners who both own shares, sit on the board and work in the company. List those roles with the documents supporting them. Include relevant employment or service arrangements and any personal guarantees for the adviser. Do not assume that stopping wages removes directorship, or that resignation from the board automatically transfers shares to the remaining partner.
ASIC explains that company extracts contain information including officeholder details. Obtain appropriate current information and compare it with the company's own records through authorised access. Ask the lawyer to explain discrepancies. A register entry can help identify what is recorded, but it does not replace review of the constitution, shareholder arrangements and documents relevant to a proposed exit.
In the example, one partner may wish to stop working immediately but retain ownership while a buyout is negotiated. Put that proposed position to the adviser clearly. Avoid using a single heading such as resignation to cover every issue. Record which matters are agreed, which are proposed and which still require advice or the appropriate approval.
Ask who can make company decisions and give instructions while the process is unresolved. Do not announce that the former partner has no role merely because the personal relationship ended. Equally, avoid leaving staff to infer authority from past habits. Have the lawyer advise on accurate current instructions and any formal changes required in the company's circumstances.
Retain the executed documents and relevant confirmations for each actual change. Keep guarantees, debts and other obligations under separate review rather than assuming an exit releases them. A clear role map helps the parties understand what is changing in the company and prevents a personal separation from being mistaken for several corporate steps that have never occurred.
