What Should Co-Owners Do When They Disagree About Selling the Company?

This page is for one owner of an established, founder-led company in Miami or South Florida whose co-owner sees a sale differently: a business partner, a co-founder, a sibling or a spouse in the business. It covers the stage before anything is decided. If you are the only owner weighing the question, read our guide to whether to sell or keep building. If the two of you have already agreed that one will buy the other out, our partner buyout guide covers that negotiation.

What are co-owners disagreeing about when they disagree about selling?

The stated disagreement is sell or keep. The one underneath can be narrower. An owner who needs money for a personal obligation may be glad to keep working in the company. Someone who objects to one buyer may support a sale to another. A tired owner may want to stop running the company and still keep an ownership stake. Write down each owner's concerns before you discuss routes, and expect more than one to apply.

Keep asking until you can state your co-owner's concern in their words and they agree you have it right. You can acknowledge a personal need without accepting the route your co-owner proposes for it. Write down where your interests overlap, and treat your co-owner's preference as a position to understand even when you oppose it.

What are the options besides selling the whole company or keeping it?

Compare the routes against what each owner needs. Your attorney or tax adviser may rule some out once they have read your agreements. Exploring a route need not commit anyone, though you should ask your attorney before signing anything along the way, such as a confidentiality or exclusivity agreement.

• Sell together. A joint sale may suit you when the disagreement is about the buyer or the terms. Agree in writing what would make an offer worth considering. Our guide to strategic buyers and private equity compares the buyer types.
• One owner buys the other. This may fit when one of you wants to keep the company and the other wants to leave. The partner buyout guide covers what is negotiated and how buyouts are funded.
• One owner sells a stake to an outside investor. If your agreements and the law allow it, the owner who wants money may sell some or all of their interest while the other keeps theirs. Ask your attorney which approvals are needed and what rights the investor would receive, since an ownership interest can carry a share of profits and sale proceeds without a say in management. Then ask yourself whether you would want that investor as a co-owner.
• A partial sale to private equity. Ask whether the investment would pay an owner for their interest or put money into the company, because only the first gives the owner who wants out any money. Any continuing role for the other owner would be agreed with the investor. Our guide to minority and majority stakes compares what each choice changes for the founders.
• A sale to the management team. If your managers want to own the company, they may be a buyer both owners can accept. Agree whether to explore this before either of you raises it with them, and read our guide to selling to your management team.
• Agree to revisit. Waiting can work when you write down what has to change and set a date to decide again. Record what each owner will contribute meanwhile, so the owner who wanted to sell knows what the wait asks of them. Have each owner's attorney check how the arrangement affects any rights or deadlines in your agreements.

Should you buy out your co-owner or sell the whole company?

Start with the company you would own the day after your co-owner leaves. If your co-owner holds the largest customer relationships or the technical knowledge, you would be buying a company that still depends on someone who is gone. Carlos's line from his banking years applies here as much as to any outside buyer: "Your valuation scales only when your absence doesn't threaten the business." A buyer may discount for what leaves with your co-owner. Ask whoever prepares the valuation how the departure, and any transition your co-owner agrees to, would affect value under the method that applies.

Then test your own view of value. If you believe the company is worth more than an outside buyer would pay, ask whether you would pay that figure yourself, and how. We would expect your co-owner to ask that question, so answer it for yourself first. Before you propose a buyout, have your own attorney and tax adviser review how it would be funded, whether from your own money, borrowing or payments from the company over time. Where the company would make payments, check what they would leave for its operations.

Carlos took the buyout route at Sandler Training Miami, buying the company to full ownership after his brother Antonio retired. A buyout fits when one owner wants to keep running the company and has a funding plan the company can live with. If neither owner wants to run the company alone, a joint sale is the stronger option.

Can one owner force the other to sell?

It depends on what is proposed and on what your agreements and the applicable law allow. Selling the whole company, selling one owner's interest and ending the company are different things, and your own attorney is the person to tell you which one your co-owner can require. Each owner should have their own attorney read the documents.

If your co-owner sends a demand or a formal notice, send it to your attorney promptly, with the date and the way you received it, and ask what response is required and by when. A notice can start a deadline, and waiting can cost you a right.

Ask your attorney to look for buy-sell provisions, drag-along and tag-along rights, rights of first refusal, and anything that says what happens when the owners cannot agree. Our partner buyout guide describes what each of these generally covers. If your documents are silent or incomplete, ask whether any other agreement applies, including an informal one, and which state's law governs your company.

Read the provisions early, and serve a notice yourself only after your attorney has explained what it starts. A notice under a provision that can force a sale turns a conversation between partners into a formal process with deadlines, and that is hard to undo. Where no deadline is running, we would work through the steps below first, alongside whatever your attorney says you need to do to protect your position.

How do co-owners reach a decision together?

Each owner writes privately what they want, by when, the least they would accept, and what they would take in place of a sale. Include whether you want to keep working in the company and in what role. Review your statement with your own attorney and tax adviser, then decide how much of it to share. The least you would accept may be the part to keep to yourself.

Exchange what each of you is willing to share in a meeting about ownership alone. Let your co-owner explain their position before you question it, and ask which preferences could move and which rest on a personal constraint. Where you disagree about a fact, note what evidence would settle it and who will get it.

Before anyone names a number, ask your attorneys whether your agreements already set how the company or an owner's interest must be valued. If they do not, agree together who prepares an independent assessment and what it should examine. If one owner already has a figure, review how it was reached with whoever prepares the shared assessment. A figure one owner commissioned alone can become a position the other is reluctant to accept.

Hold these conversations apart from operating meetings, with an agenda sent beforehand. If the same arguments keep returning, consider a neutral facilitator or a mediator both owners choose. Set a decision date, and agree in advance what happens if it passes without agreement, with each owner's attorney reviewing that step. When the co-owners are relatives, the family relationship sits alongside all of this, and our guide to professionalizing a family business covers that ground.

Should either owner talk to buyers before you agree?

We would hold off until your attorney has told you what you may do alone. Your agreements may let an owner explore a sale of their own interest, subject to approvals or a co-owner's right to buy first. They may also limit what company information you can share. Ask your attorney which information you may disclose and whether a confidentiality agreement is needed first.

A private conversation with a buyer also creates expectations, on the buyer's side and in your own mind, before the owners have chosen a direction. A buyer who learns that the owners are split may lose interest or use the split in the negotiation. Carlos acquires businesses in Miami with Carolina Duran, an interest we disclose, and from the buyer's side the first thing to establish is who can authorize the sale. Owners who can show they agree, including which of them will stay for a transition, give a buyer one less reason to doubt that the deal will close.

If a buyer has approached one of you, keep a record of the contact and of anything said or shared. Unless your attorney advises otherwise, tell your co-owner and agree the reply together. Our guide to responding to an unsolicited offer covers that conversation. An approach can be a useful reason to discuss ownership, and it decides nothing on its own.

How do you keep the company running while you decide?

Keep operating decisions apart from the ownership question. Use the company's existing decision process, and take any dispute about authority to your attorney. When you object to an operating decision, object to the decision itself and record why. Holding back agreement on ordinary business to pressure your co-owner harms the company you both own, whichever route you choose.

Agree one message for managers and staff, and keep employees out of the argument between owners. Asking a manager to back your side puts them in a difficult position and splits the team. Before you say anything about a possible sale, read our guide to telling your team about a sale, and ask your attorney about any disclosure obligations.

What should you ask your attorney and tax adviser?

• What your agreements and the applicable law allow each owner to do, and which decisions need the other owner's consent.
• What could follow from contacting a buyer, sharing company information or serving notice under any provision.
• How each route, from a sale of the whole company to a buyout or a partial sale, would be taxed for you personally.
• What happens to any personal guarantee you have given if your co-owner leaves or the company is sold.
• Which employment and benefits questions a change of ownership would raise.

What should co-owners do next?

• Send any notice to your attorney now. If either owner has served or received a formal notice, find out what response is required and by when before anything else.
• Write your own position. Set down what you want, by when, the least you would accept and what you would take in place of a sale. Review it with your own attorney and tax adviser, and decide what to share.
• Agree the process. Check whether your agreements set a valuation method, then hold an ownership meeting with an agenda and set a decision date with an agreed next step if you are still divided.
• Protect the company meanwhile. Confirm who has authority for operating decisions under your existing arrangements, agree who speaks to managers, and write it down.

The Leadership Scorecard takes ten minutes and shows which parts of the company still depend on its owners, the dependence a buyer examines and a buyout has to account for.