Exit Planning: What Happens When Only One Partner Wants Out

One of the most common and least planned for exit scenarios is this: one shareholder wants to leave, and the other does not.

It happens more often than most business owners care to admit. Priorities change. Health intervenes. Retirement looms. Or one partner simply wants their money back while the other still has appetite to grow. Handled badly, this situation destroys value and relationships. Handled properly, it can be resolved without destabilising the business.

The uncomfortable reality most partnerships ignore

Many partnerships are built on trust, history, and goodwill. Very few are built on clear exit mechanics. When one partner wants out, the immediate problems are usually:

• No agreed valuation methodology

• No funding plan for a buyout

• No clear timetable

• No agreed route to market

• Conflicting personal objectives

At that point, the business becomes the battlefield.

Option one: internal buyout

The first question is whether the remaining partner can realistically buy out the exiting shareholder. This depends on three things:

1. The value of the exiting stake

2. The cash available or borrowable

3. The timescale the exiting partner is prepared to accept

Deferred payments, vendor loans, or structured earn outs can work, but only where trust remains and the business generates reliable cash flow. If the deal relies entirely on goodwill and future performance, expect tension.

Option two: third party investor or partial sale

Where an internal buyout is not viable, introducing a third party can solve multiple problems. This might involve:

• A minority investment to fund the buyout

• A majority sale where the remaining partner rolls equity

• A strategic investor with sector expertise

This route often preserves continuity while allowing one partner to exit cleanly. It also introduces professional governance, which many owner managed businesses lack. The key is structure. Poorly structured partial exits create more problems than they solve.

Option three: full market exit, even if not everyone wants it

Sometimes the reality is simple. The business is only saleable as a whole. If the partnership agreement allows it, or if deadlock is reached, a full market sale may be the only commercially sensible outcome. One partner exits entirely. The other may stay on under a new ownership structure or exit alongside them. This is rarely emotional. It is commercial.

Why early exit planning matters

The worst time to discuss exits is when one partner has already decided to leave. Proper exit planning addresses these issues in advance:

• Valuation expectations

• Shareholder rights and restrictions

• Funding options

• Partial versus full exit scenarios

• Timescales and deal structures

Without this groundwork, negotiations become personal rather than professional.

Do not confuse fairness with value

Many disputes arise because partners focus on what feels fair rather than what the market will pay. A shareholding is only worth what someone else is prepared to buy it for, on terms they can fund. Internal valuations, historic effort, or emotional attachment do not pay exit cheques. Market led thinking avoids stalemate.

When only one partner wants out, the business does not have a people problem. It has a planning problem. At BusinessExits.co.uk, we work with business owners to plan exits early, structure solutions sensibly, and protect value when shareholder objectives diverge.

If you are facing a partner exit or want to avoid one becoming a crisis, contact us today to discuss your options before control is lost.