Parting Ways With Your Business During COVID-19
You may have been excited about owning a business several years ago or maybe even earlier this year, when the economy wasn’t so bad. However, with COVID-19 whipping through the United States and forcing quarantines and business closures, you may have changed your mind.
No business has been left untouched. You likely have seen reduced revenues and have been forced to lay off employees. If your business is seeing devastation and you feel there’s no way out, you may want out of your business contract so you can move on and build something bigger and better. If you own a business with one or more other partners, you may want to part ways but at the same time feel pressure to stay.
You’re not alone. Many people are seeking a business divorce of sorts during these tumultuous times. It’s possible that the coronavirus crisis could go on for many more months—or even years. Unless you receive some substantial form of financial relief from the government, your business may not survive. The $1200 stimulus check isn’t enough to help all that much and not all businesses qualify for the Paycheck Protection Paycheck.
Almost all companies are facing the same issues. The main one is not making any money, while fixed costs—such as insurance, rent and utilities—add up. Since people must shelter in place, and many employees cannot work remotely, many have to be laid off. There is no money to continue paying employees who are not able to work. Even if you can still keep your business open in some way, you may be facing supply shortages. Prices are rising on certain items. If you operate via contracts, you may not be able to fulfill them.
With millions of people getting laid off, there just may be a reduced demand for your product or service right now. People are having to make hard choices about their finances. Food and shelter are necessities. If you’re not providing an essential service for the public, then your business is going to be overlooked for the time being.
If you decide to leave the company during this time, there is likely to be some sort of dispute. This isn’t an easy time for any business and huge decisions will need to be made. You and your partners may have differing opinions and if you cannot reach an agreement, then it may be time to leave the business. You will need to take a good look at the business contracts involved and understand your obligations as well as the process involved.
Learn More About Business Contracts
Many private businesses have multiple owners and these owners may have conflicting views about how they want to run their business or continue on with it, especially when a pandemic is hurting business revenues. It’s good to have a contract in place to help you understand your options.
When buying or selling a business, make sure you have the right documents in place. Orlando business contracts lawyer B.F. Godfrey from Godfrey Legal can make sure your rights are protected in business transactions. Schedule a consultation today. Fill out the online form or call (407) 890-0023.
Resource:
law360.com/articles/1267474/business-divorce-in-the-time-of-covid-19
https://www.godfreylegal.com/coronavirus-considered-a-force-majeure-in-business-contracts/
