I'm in a 50/50 ownership S Corp and considering leaving. Am I entitled to half of everything including accounts payable?
I started a small contracting business with a partner a few years ago. We are 50/50 owners and have contributed equally on all aspects. I am considering leaving the company. We have grown from around $400,000.00 to $800,000.00 in sales in five years with current receivables at $200,000.00. Am I entitled to half of the receivables if I leave? We do not have much inventory so I'm not worried about that part.
This is a complicated situation as we all know and depends on many factors like how is your company structured, what are the buyout clauses, was there any vesting, are you in good relations with your co-founder or not etc.
Although any liability of a company should stick with the company and not transfer to individual if setup correctly, you could be set liable for accounts payable if the separation agreement is not strong enough and doesn't include your assets (% of receivables), compensation by the company or the other co-owner to buy you out along with the liabilities that you carry (and for what time).
If you are into an uncontested agreement -
Negotiate with your partner the % of receivables, % of liabilities.
Locate all documents where you signed as a representative and could be hold liable (mortgages, liens, contracts)
Negotiate leaving terms
Get your name removed from all obligatory documents
Write and sign a separation agreement (individually and from a company)
Get yourself a right to audit financials (if you don't get paid after you leave)
Get your name off all the company docs.
Strong separation agreement
Protect yourself from any future lawsuits the company might end up in after you leave by drafting a strong separation agreement that clearly states that company is not going to account you liable for any third party actions or lawsuits arising after you leave the company either from the past contracts or future. Include the final division of the assets and liabilities, including how and when those will be paid and if not paid then what actions can be taken by you.
Seems like your partner is a good partner and you want to just leave because of other priorities. An easy leave could be 50% of receivable and 50% of accounts payable until a certain date.
Hope this helps.
Best of luck!