Dissolving a Business Partnership

Dissolving a Business Partnership

Dissolving a Business Partnership - Guideline

  • Have your attorney review your documents and tell you exactly where you stand from a legal point of view. This is important so you will know your limitations as you begin your plan to dissolve the business partnership.

    If you have a written agreement about responsibilities for each of you, assess whether it is still appropriate or needs to be changed.

  • Get information on dissolving your business. Go to your local government website and look for information on businesses. They should have a form for dissolving a business partnership. A business can dissolve completely or dissolve and become another form of business, such as, corporation or llc.

  • Once the business is dissolved, you need to file a statement of dissolution, which lets third parties know that neither partner has any rights to enter into binding transactions unless it’s to end the business. It is usually assumed that all third parties know of the dissolution after ninety days of filing the statement of dissolution.

  • Notify the people you do business with. Be sure to send out a notice letting people know about your business dissolution. You can send them to your customers, clients and suppliers. Usually, the partner who initiated the dissolution is responsible for announcing it. If you are dissolving the business and starting a new company, be sure to include the information in the notice, including the new company name.

  • Examine leases, contracts and loan agreements before dissolving the business. You want to make sure that there will be no legal issues if the business is dissolved. You don’t want someone filing a lawsuit against you or your partner because you didn’t follow the agreement. Don’t neglect to learn if the dissolution of the partnership will affect those agreements.

  • Get a business attorney. You may want a business attorney to help you through the process, especially if your business has grown significantly or if you could be facing liability issues.

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