
Christopher D. Warren
Partner
212-390-8060 cwarren@sh-law.comFirm Insights
Author: Christopher D. Warren
Date: March 13, 2024
Partner
212-390-8060 cwarren@sh-law.comThe dissolution of a business partnership is not as simple as shutting the doors. Just like when launching a new business, there is a legal process that must be followed to ensure that you and your business don’t face unintended liability.
In addition to reaching an agreement between partners to wind down the partnership, other important issues to address may include liquidating your assets, terminating your lease and/or selling your commercial property, resolving outstanding liabilities, canceling contracts, and notifying customers, employees, vendors, and other business partners that you plan to close. Because failing to dissolve your New York or New Jersey partnership properly can lead to significant legal issues, we always advise consulting with an experienced partnership attorney.
Navigating the partnership dissolution process is a lot easier with a clear roadmap in place. In many cases, your existing partnership agreement will establish the procedures for dissolving the partnership or at least give you a good starting point. For instance, the dissolution provisions in your partnership agreement may address the events triggering dissolution, the rights of each party upon dissolution of the business, the methodology for valuing the business and each partner’s interest, and other key issues.
Even with a partnership agreement in place, it is always wise to work with an experienced partnership lawyer to draft a comprehensive dissolution agreement. Having a written agreement in place helps ensure everyone is on the same page, reduces the risk of disputes, and helps shield you from liability.
Once you have a business partnership dissolution agreement in place, the process of actually winding down the partnership begins. This typically involves:
Failing to take the proper steps in the dissolution of a business partnership will almost always lead to legal headaches, whether it’s a disagreement between partners over the distribution of profits or an action by the Internal Revenue Service for unpaid taxes. As a result, many businesses seek the assistance of experienced professionals, such as accountants and business attorneys, who are familiar with the process. This helps ensure that all of the required steps are completed to officially dissolve the partnership and avoid any unforeseen future liability. The attorneys of Scarinci Hollenbeck’s Partnerships Practice Group provide experienced counsel to New York and New Jersey partnerships of all sizes in a wide variety of industries. Whether you are looking to form, grow, or dissolve your partnership, our team will guide you through the process and develop a strategy that advances both your business and legal interests.
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