Tips about dissolving a partnershipDecember 18, 2015 5:17 pm Leave your thoughts
If you are considering dissolving a business partnership over a dispute, it is important that you do not act too hastily. Taking the proper steps and giving consideration for the ramifications are vital to making sure that any changes to the structure of a partnership are smooth and not contentious. Here are a a few tips to keep in mind when contemplating dissolving a partnership.
Review your partnership agreement
Ideally when you went into business, you drew up a partnership agreement stipulating the rights and responsibilities of the partners and containing provisions on how to resolve disagreements. While such agreements are not required by law, having one in place can often help avoid disputes or give you a guideline for how dissolutions are to be handled.
Considering the ramifications is vital to making sure that any changes to the structure of a partnership are smooth and not contentious.
Review your business as it stands
Take into account existing contractual obligations, business assets and duties. All of these obligations may be impacted by a possible dissolution as after, each partner will have to assume certain business assets and liabilities based on a percentage of ownership. Often, conducting an official valuation of the business by a third party may be required.
Consider alternatives to dissolution
Since dissolution can be an involved and potentially expensive process, consider if there are any alternatives to a full dissolution. Would a dispute be resolved by changing the weighting of a partnership, so one partner acquires more decision-making or financial control through a majority share while the other can remain partner but step back? Could one partner buy out the other partner's shares?
Draft a dissolution agreement
If no other resolution is possible, consult with an attorney to help draft a dissolution agreement. The Arizona business lawyers at The Law Offices of Donald W. Hudspeth, P.C. have extensive experience mediating partnership disputes. Call us today if you are considering a dissolution and we would be glad to assist you.
This post was written by multi_admin