How to leave a business partnership

Leaving a partnership is possible even when the other partners don't want you to. Brazil's Civil Code guarantees the right to withdraw and regulates how your share must be valued. What turns the exit into a nightmare, almost always, is leaving without documents, without numbers and without formalizing the change. Done right, the exit protects you from the company's future debts and preserves what you built.

The practical path

1. Read the articles of association and the partners' agreement. They may set rules for leaving, a notice period, how your share is calculated and paid, and the other partners' right of first refusal to buy your quotas.
2. Choose how to leave. You can sell your quotas to another partner or to a third party (following the contract's rules) or exercise the right of withdrawal. In a partnership with no fixed term, the Civil Code (art. 1,029) provides for withdrawal by notifying the other partners at least 60 days in advance.
3. Give notice in writing. An email with confirmation, an extrajudicial notice or a registered letter with return receipt. Keep the proof.
4. Ask for the numbers. To value your share (in Portuguese, haveres), the Civil Code (art. 1,031) provides, unless the contract says otherwise, for a special balance sheet on the date of departure. Ask for balance sheets, statements and the list of debts. If you can, hire an accountant you trust to check them. The amount is paid in cash within 90 days, unless there is an agreement or a different rule in the contract (art. 1,031, §2).
5. Formalize the amendment to the articles. The exit must be registered at the Junta Comercial (Commercial Registry). Note: under the Civil Code (art. 1,032), the departing partner remains liable for the company's prior obligations for up to two years after the exit is recorded. The sooner you register, the sooner that period starts.
6. Get out of the guarantees. If you signed as guarantor or surety on company loans, negotiate a replacement with the bank. Leaving the partnership doesn't automatically take your name off those guarantees.
7. If there's no agreement, go to court or mediate. When the partners refuse to sign or to value your share, there is the lawsuit for partial dissolution. Mediation and arbitration can be faster. A business lawyer is indispensable here.

This page is general guidance, not a legal opinion.

How Bairo went through it

Bairo Leandro Gonzalez Martinez says he didn't leave a partnership: he was pushed out of it. With the cosmetics brand up and running, he brought the idea of a touchscreen solution, and the partners removed him from the business. The idea stayed with them.

His story tells how he found the pain and, instead of running from it, made it his foundation. Not as an open wound, as ground to stand on. He went to work in events and digital printing and started over. The most expensive lesson of that phase was about whom to build with, and about agreeing on the exit from the moment you go in.

The Method step

This situation belongs to step 4 of the Seventh Attempt Method: choose whom you build with. In your next partnership, the question "how does someone leave, and for how much?" gets answered in writing on day one. If you're leaving now, use what you've learned as a list of clauses for next time.

Discover the Seventh Attempt Method

Read also

• How to choose a business partner
• My partner cheated me: what do I do?
• Every no is the ground of a yes