You may have heard the saying that all good things come to an end. Business partnerships are no exception to the rule. What started out as a great idea between friends, may not have turned out how you expected, even if the business itself is thriving. In such cases, you and your partners may find that it is best to dissolve the partnership and go your separate ways. An attorney specializing in business and commercial law can make the dissolution process go more smoothly for everyone involved.
What is involved in the dissolution process?
A written agreement is not required to start a partnership, but it can be extremely helpful to have the terms of the dissolution process laid out in black and white. If you have an agreement, follow the steps for dissolution provided in the partnership agreement. If you do not have an agreement, you will have to follow Texas laws for the dissolution of a business.
Generally, the dissolution process will include the following steps:
- Vote among partners (typically, majority must consent to the dissolution for it to go forward)
- File dissolution papers filed (not required, but beneficial)
- Notify creditors, customers, vendors, and other affected parties.
- Settle remaining business debts
- Divide up any remaining assets among the partners.
Does the business have to end if we dissolve our partnership?
Not necessarily. If one partner dies or chooses to leave for personal reasons, the old partnership will dissolve, but the remaining partners may choose to continue in a new partnership.
Dissolving a partnership can be a stressful time for everyone involved. A business law attorney can make sure that all parties are treated fairly throughout the process.