How to Leave Your Company Without Closing Its Doors

Quitting your own company does not always imply shutting it. Learn about your alternatives for leaving when the time comes.

What you’ll discover:

Can I just walk away from my company?
What are the signals that I should leave my company?
What choices do I have if I wish to leave my company but keep the doors open?
How can I legally hand over ownership of my company to someone else?

Small company owners and entrepreneurs understand that operating a business is a lot of hard work. Others, on the other hand, may feel irritated and exhausted by the duty of keeping their enterprises viable. This is when you should take a step back. But, leaving does not have to imply shutting the doors. The questions and answers that follow describe how company owners may walk away without shutting their doors, including choices, alternatives, reasons, and more.

Can I just walk away from my company?

The sort of company you manage determines whether you can just walk away from it. If you have a physical location, debts, continuing contracts, suppliers, employees, assets, and a formal corporate structure, you will almost certainly need to take certain legal measures before leaving your firm to avoid penalties, fines, or other repercussions.
Continue to rely on management.

If your company has a dependable management, stepping away may be as easy as putting a few additional duties to that manager’s plate. Hiring a manager may frequently free up your time to pursue other endeavors or just enjoy life if your firm does not rely on your own particular abilities.
Sell or close your company.

If you are ready to retire, you may wish to sell or liquidate your whole firm. If you are a lone owner, you may desire to sell or dissolve your firm. To dissolve a sole proprietorship, you may need to submit the necessary paperwork with a local or state government. Failing to do so may result in additional tax and filing requirements.
Break up a partnership

Companies with several partners may need to prepare more carefully before walking away. Partnerships may need to be bought out or terminated. If the firm has several partners, a Dissolution of Partnership Agreement may be the answer. After signing the agreement, the partnership must still wind down in order to pay debts, liquidate assets, and file Articles of Dissolution with the state.
Declare bankruptcy

If your company is struggling, declaring bankruptcy may be an option. After a bankruptcy, you may be able to walk away from your firm debt-free or with a plan to repay those obligations. Personal debts, however, may not be dismissed based on how the firm is constituted and the kind of bankruptcy petition you submit.

Moreover, some organizations have a large number of assets, including costly equipment. A company owner may choose to sell its assets as a whole or lease the assets to someone else.

What are the signals that I should leave my company?

Whether opting to sell, close, or just step back from an active involvement in your firm, there are often two key factors. There are financial indicators as well as personal and emotional indicators.

Cash flow and debt issues are common financial indicators that it is time to go away. When business and sales are down, or you borrow more money than your company can repay, considering an exit strategy may be a smart option. If your company is no longer producing money, it may be time to go before your obligations become unmanageable. Yet, if you are exhausted and your finances are hurting, or even if your income is constant, hiring a determined company leader to take over may be able to get the cash flowing again.

The personal and emotional aspects of owning a company might also be driving factors in deciding to move away. Even when things are going well, running a company can be stressful and draining. Stress may have a negative influence on your health and morale. If the joy you had when you first began the firm has faded and you hate coming to work for yourself, it may be time to reconsider your job. Note that walking away does not always imply closure.

What choices do I have if I wish to leave my company but keep the doors open?

You may have numerous alternatives if you wish to keep the firm running but surrender control.

Employing a manager or management team may be able to relieve some of your responsibilities as a company owner. Although this may be expensive, it enables a company owner to make cash more passively. Similarly, if your company is well-established and your income is consistent, leasing it as a turnkey operation might be lucrative and offer ongoing profit sharing for you. Moreover, turnkey firms are often appealing to buyers and investors.

If a business owner does not want to lease or sell the whole company, he or she might form a silent partnership with investors. As a silent partner, a business owner might have a less role in the company’s day-to-day management and operations. Instead, their primary contribution will be the firm they founded, with the new partner(s) handling management and day-to-day operations.

How can I legally hand over ownership of my company to someone else?

There are various methods for transferring legal ownership of a company. Completing a Selling of Company Assets Worksheet before selling a firm might help you become organized.

When you decide to sell your company fully, you should consider signing a Business Selling Agreement with the buyer. The Company Selling Agreement specifies the terms of the transaction. Whether you want to sell merely a portion of your company or the transaction has complicated provisions, consulting with a lawyer is always a smart idea. A lawyer can ensure that the contract says what you want it to say and that you are protected if anything goes wrong.