Business partnerships represent legal arrangements, and whether you’re leaving on good terms or as a result of a dispute, it is important that all of the correct steps are taken to ensure that all parties and stakeholders are protected. Though the most straightforward partnership dissolutions follow the steps outlined in a partnership agreement, not every business arrangement is wrapped in a formal contract. If no agreement exists, the process and requirements will follow state laws. Still, even with controls and regulations in place, there are certain steps that you can take to ensure that things go as smoothly as possible.
- Gather all your records – Being organized and thorough is the key to protecting yourself when you decide to leave a partnership. Start by collecting all of your important papers and account records and make sure that they are arranged in a way that makes it easy for you to access the information you need quickly. Do not rely on a haphazard storage system: there’s a good chance that your accountant or your attorney will need to sift through these documents, and the more disorganized you are, the longer it will take for them to find and make sense of them, and the more you will be billed.
- Assemble a comprehensive list of assets and liabilities – As a business partner, you own your portion of all assets and you are responsible for your portion of all liabilities and debts. Make a comprehensive list that includes values, and if you’re uncertain as to what they are then arrange to have an appraisal conducted. That is the best way to ensure that things are distributed fairly.
- Investigate your state’s Uniform Partnership Act – In the absence of a partnership agreement, you’ll need to familiarize yourself with your state’s rules for dissolving a business partnership. You’ll probably find it on your state’s website.
- Consider a separation agreement – If your departure will result in the business being shuttered, then there is no need for a separation agreement. But if the other involved parties do not want your departure to mean the business’ end, you will need a separation agreement to document terms regarding having your name removed from all documents and contracts.
Leaving a partnership can be easy or it can be incredibly divisive. To ensure that the process goes as smoothly as possible, consult our business partnership attorneys today.