Leaving a company could be an easy decision, but is the process as easy as well? This article outlines what a partner must do to leave a partnership within legal terms.
When someone becomes a partner in a company, he assumes rights and duties. Aside the participation in a corporation, in which the individual is a simple shareholder, there are other business models such as the association of capital and people.
And that's why people say partnerships are like marriage. In a business relationship, as much as in a marriage, one partner should give explanations to the other.
Leaving a Company
There are many different situations which explain why a partner leaves a partnership. You will find out below why and how to leave a company.
Wish of the Partners
In this case, the partners enter into an agreement in which the output of a partner is deliberated. The partner's assets are calculated and he receives the value due during his previous participation in the Partnership.
Death of Partner
In case of death of the member, his successors have no obligation to enter into the organization, and they may require a partial dissolution. However, if they wish to join in, with the resolution of the shareholders, there is no reason for a partial dissolution.
Even a contractual clause may not prevent the will of the parties. The death of a partner can be a typical case of judicial dissolution, if there is a disagreement between the parties as to the dissolution clause. And it can also be a case of non-judicial dissolution, if there is agreement among the parties.
Withdrawal of a Partner
Leaving a company by virtue of the right to withdraw, it's a decision that can be a:
- Consensus: the assets of the partner – who wishes to withdraw – will be ascertained and the forms of payment should be combined, if there is any.
- Controversy: if there is no agreement, the partner that wants to withdraw may bring up an action for partial dissolution of the partnership, to enforce his withdrawal.
According to the article 1029, in a limited partnership of undetermined period, any partner can proceed with his own withdrawal, if he presented a notification to the other partners in a minimum advance of 60 days.
Exclusion of a Partner
The exclusion of partner consists of a situation in which a partner does not accomplish his obligations in the partnership. If this happens, he can be excluded by the other partners. Since the partner violated or did not accomplish his social obligations, he will be excluded by fair reason.
A partner can live a partnership by selling his own participation to the other partners or to a third party. To leave a company in this manner, it's necessary to: Check what the employment agreement says about the forms and deadlines for this to occur; it is mandatory to offer preferential treatment to the other partners. If the other partners have no intention to purchase, it is possible to start negotiations with third parties. If the initial proposal is changed, the partners should be notified in order for them to decide whether to exercise or not the right of preference in the acquisition.
After Leaving Obligations
It's a general comprehension that an ex partners couldn't be responsible for labor obligations related to the company he once had worked. The new Civil Code, in the article 1003, establishes that two years after the modification of the shareholders agreement, meaning two years after the partner leaves, the same must respect and accomplish the obligations that he had as a partner.
Only after this two years will the individual be free from any partnership obligation. The Brazilian law also prescribes that the withdrawal, exclusion, or death of a partner, do not exempt him – or his heirs – from the responsibility for the earlier labor obligations, until two years after the resolution endorsed by the partnership.
The new Civil Code is advanced in terms of legal certainty, since it is essential for business and for its people. It leaves no doubt that the responsibility of the ex-partner related to the partnership and to the others, extends up to two years after his departure.