How to Exit a Toxic Business Partnership (Without Losing Your Sanity or Your IP)

Right up there with noise-cancelling headphones and and never agreeing to another “quick collab call”, one of the best decisions that was ever made was ending a business partnership that had gone completely sideways.

It started with good intentions, as most do. Shared goals, big dreams, lots of “you bring the ideas, I’ll bring the energy” talk. But somewhere between Canva passwords and client meetings, I realised I wasn’t in a partnership — I was in a solo act with someone else’s name on the marquee.

Whether your partnership's fizzled, flopped or burst into passive-aggressive flames, this one’s for you. Let’s talk about business partnerships, how to exit toxic ones, and why a proper shareholders agreement is your new best friend.

1. Begin With the Boring Stuff (You’ll Thank Yourself Later)

If you’re thinking of starting a business with someone — whether they’re a friend, colleague, or that super passionate person you met at a coworking space — start with a shareholders agreement.

It’s not romantic, but neither is trying to divide client ownership after someone storms out with half the Google Drive.

A good agreement should cover:

• Roles and responsibilities

• Who owns what (especially IP)

• How decisions are made

• What happens if someone wants out

• Dispute resolution (because it will save your bacon)

Skipping this step is like building a house with no door locks. It’s all fine... until someone walks out with the cutlery and the couch.

2. Guard Your IP Like It's the Last Tim Tam

Here’s what you don’t want: waking up one day to find your content, strategy docs, or client lists have been downloaded, duplicated, and rebranded like a Boxing Day clearance sale.

Before things go sour:

• Register your business name and domain

• Trademark anything valuable

• Lock down your passwords and admin access

• Set up cloud backups with user permissions

• Keep an eye on who has access to what (and why)

You don’t need to be paranoid — just professionally cautious. Think of it as putting a seatbelt on your ideas.

3. Keep One Eye on the Money (and the Other on the Calendar)

In theory, business partnerships are about shared effort. In practice, they sometimes turn into one person burning the midnight oil while the other’s still in pyjamas sipping oat lattes and “thinking about strategy.”

That’s fine… until you realise you’re footing the bill for their morning musings.

Set yourself up with:

• Accounting software both partners can access

• Approvals for large expenses

• Clear tracking of financial and non-financial contributions

• Monthly reviews of who's doing what

If you’re pulling 80-hour weeks and they’re pulling... a coffee mug to their lips, it’s time for a chat.

4. Spot the Red Flags (They’re Not Decorative)

Some signs you might be in a doomed partnership:

• Constant excuses and missed deadlines

• Clients being treated like an inconvenience

• Meetings that feel more like therapy sessions

• Sudden “forgotten” tasks and selective memory

• Passive sabotage disguised as “honest feedback”

None of these are quirks. They’re blinking neon indicators that something’s off. Trust your gut. It usually knows before your inbox does.

5. Get Legal Advice Before Things Get Messy

Don’t wait until your partner announces they’re leaving via a vague email and takes half your clients on the way out.

A quick legal consult early on can:

• Help you clarify your rights

• Map a clean and fair exit

• Stop things getting unnecessarily expensive (or awkward)

• Save your reputation with clients, suppliers, and investors

  
  

Exiting toxic business partnerships is hard enough — don’t make it harder by going in blind.

It’s Not You. It’s The Business Structure.

Ending a bad business partnership doesn’t mean you’ve failed. It means you’ve evolved. It means you’ve chosen your sanity, your clients, and your creative energy over chaos.

Business partnerships should feel like collaboration — not a hostage situation with shared logins. With the right setup (read: shareholders agreement, solid IP protection, and a financial trail), you can protect what you’ve built and walk away gracefully if needed.

And next time? Choose a business partner who doesn’t treat deadlines like vague suggestions and gets dressed before Zoom calls.