Dissolvement of Partnerships
Business partnerships are made of various legal entities and often involve multiple parties. Due to the nature of partnerships, the dissolvements of them is a unique process that often requires legal efforts. In order for a business to dissolve appropriately and legally, a distinct process must be followed. For this reason, it is advised to hire an attorney in order to guide you through the proper steps involved in dissolving a business partnership.
Business partnerships are commonly established by a written agreement. These written agreements tend to outline key provisions for possible dissolution, creating a helpful blueprint for dissolvement proceedings. As a result, there might be clear communication already established regarding asset division and debts.
However, in the state of California, partnership agreements are not required. Those who do not have agreements and dissolvement blueprints in place have to follow the guidelines set up the California Revised Uniform Partnership Act (RUPA). Using RUPA (or set agreement) business partners will vote on the dissolution. Resolutions must be passed by the majority. If enough partners dissent and mediation is not successful, entities will go to court.
When businesses dissolve there are significant assets and debts involved. Creditors need to be paid back and assets need to be sold. Furthermore, in California, a Statement of Dissolution must be filed with the Secretary of State. This is the most legally notable actions that terminates the business’ liability.
Once an attorney is hired, they will take control of the dissolution process. Not only will get file with the California Franchise Tax Board and the Board of Equalization, but they will advise and guide you through the process. With the help of an attorney, the complicated process of dissolving a business will be manageable.