Most businesses experience an endpoint.
Sometimes partners disagree over the direction of the company.
Sometimes health-related issues necessitate a change.
Whatever the reason, if you’ve come to a point in your partnership where it’s time to wind things down, you can help ease the transition by following a few key steps.
- Determine if your partnership agreement covers the dissolution process
Some partnership agreements outline a formal dissolution process. Others are silent on this matter.
Of course, if there’s a formal process that must be followed, ensure you take every necessary step to adhere to this process.
However, if there’s no written agreement, the controlling default rules at law depend on the circumstances of the partnership dissolution.
- Talk with your other partners
You should make every effort to ensure everyone sees eye to eye; address any outstanding debts or possible future liabilities; and create a plan for a satisfactory dissolution can help save you the pain of legal conflicts further down the road.
Needless to say, all of this is made far easier if there is an agreement in place that controls how this process will work.
- Notify other interested parties
You shouldn’t limit your discussions to just your other business partners. You should also inform your employees, customers, landlord, and any other interested party who will be impacted by the dissolution of your business.
- File papers with the state
While not every state requires you to file a formal dissolution of your partnership, it’s often a good idea to do so. An official filing can help you resolve any further obligations that may arise.
- Settle up
Pay off or settle any outstanding debts. If you have any assets left over, you should distribute them according to the terms of your dissolution agreement. This includes closing any bank accounts linked to your partnership.
It’s not wise to simply close up shop and walk away. You should always discuss what steps you need to take with a skilled legal professional. This can help ensure a smooth transition as you begin a new chapter in your business life.
If you have questions about dissolving a business partnership, contact Bashian P.C.