Whether you’re not making enough of a profit or you’re ready to move on to new endeavors, there are many viable reasons why you might choose to close your small business. However, if you were running the company with partners, the closing process can be complicated. If you’re preparing to meet with a business law professional, use the following guide to understand more about dissolving a partnership.

4 Steps to Dissolving a Business Partnership

1. Schedule a Team Meeting

Unlike large corporations, it’s likely that your partners already know about your plans to close and why you are doing so. Still, there should be a formal discussion with all parties involved. During this meeting, you’ll want to review the dissolution section of your original partnership agreement, as it might stipulate specific next steps. You’ll also want to discuss any outstanding debts and establish a plan for paying these off.

2. File the Necessary Documents

If everyone agrees about the dissolution, you begin the formal process by filling out your state’s “dissolution of partnership” form. This document states that the business is being dissolved and lays out specific steps on how assets will be handled. A business law professional will let you know whether you can submit the form in your state alone, or whether you must also file in other states where you were conducting business.

3. Alert External Parties

Although everyone in your company may be on the same page, you’ll need to have conversations with parties that you do not see or meet regularly. Lower-level employees, the landlord or building manager, and the IRS all have stakes in the state of your company. The IRS may require you to follow a business closing checklist to make the dissolution official. You’ll also want to draft an email or direct mailing to notify your customers or clients.

4. Manage Your Accounts

If you had a business credit card, took out a loan, or owe any other creditors money, you’ll need to alert them of the dissolution and work out a plan to pay them back. If you opened a business checking account, you might want to distribute the money to the various partners before closing it. 

If you’re ready to close your company and want to consult with an experienced business law professional, reach out to John Rorem of Gig Harbor, WA, today. For over 50 years, this attorney has been working hard to represent small businesses and help them through times of transition and growth. He can also help with personal injury and real estate law cases. To learn more about his practice areas, visit their website or call (253) 858-5358 today to schedule a consultation.