While you may have entered a partnership with great intentions and high hopes, a lot can change when you begin to run and grow a business. One day, the time may come when you decide to step away from your partner and venture out on your own. If you’re in this situation, use this business law guide to learn how to dissolve a partnership properly.
How to Dissolve a Business Partnership
1. Reference the Agreement
When you first established the partnership, you and your colleagues had to draw up a detailed agreement—part of which defined rules for the potential end of the business. In fact, there may be strict protocol in place for the dissolution process, such as a majority vote among the partners. You may also need to provide the other partners with advance notice as to your intentions and sort out crucial matters, like paying off debts and resolving liabilities.
2. File the Paperwork
Once all the key players have been looped in, get a hold of a dissolution of partnership form for the state government. There may be a nominal filing fee required to submit this document. However, this is essential for ensuring that the state officially recognizes the end of the partnership.
3. Tie Up Loose Ends
Once you’ve filed the paperwork, you should let all the individuals and entities associated with the partnership know. For example, you’ll need to notify the IRS, the commercial property owner, any vendors, and your customer base.
You’ll also need to close out any business accounts, such as checking accounts or credit cards, and pay off any remaining debts. If you have any lingering assets, such as the deed to an office space, you and the partners will have to manage the sale or transfer of the property.
If you’re looking for legal help to dissolve a partnership, reach out to Kratovil Law Office, PLLC of Charles Town, WV. Attorney James T. Kratovil is well-versed in business law, and he has over four decades of experience as a lawyer. Whether you need help choosing a business structure, drawing up a contract, or dissolving your partnership, you can rely on his skilled guidance and attention to detail. To learn more about his practice areas, visit the website or call (304) 728-7718 to schedule a free consultation.