What Steps Do I Need to Take to Formally Dissolve a Business Partnership In Pennsylvania?
It’s hard to say whether it’s harder to formally establish a business partnership in Pennsylvania or to dissolve a business partnership in the state, but the latter probably feels more arduous, if only because it generally lacks the enthusiasm and excitement that comes with starting a new venture. No matter the reason for the partnership dissolving or your emotions surrounding the event, you can’t just shut the doors and turn out the lights: there are certain steps that you must follow in order to satisfy the state’s requirements.
The state wants to make sure that you meet all of your tax obligations and that they get all monies owed to them before you walk away, and as a result, there are forms that must be completed before you receive tax clearance letters from both the Department of Labor and Industry and the Department of Revenue. To get those letters you need to file the Department of Revenue’s Form REV-181.
Beyond obtaining this paperwork, there are also steps that will be specific to your business and the requirements set form in your business formation documents. Most of these contracts will have established a dissolution process. Depending upon the size of your business and the formality of its structure that may require agreement or a unanimous vote by members, or even a majority or specific percentage of members who agree to the business being dissolve. Without that specific language, you may simply accomplish the dissolution through a unanimous written agreement of all involved. You will also need to distribute all assets and pay all debts and obligations.
The last step will be to alert the Pennsylvania Department of State that you are dissolving the business. This is accomplished through the filing of a Certificate of Dissolution, which must be signed by at least one member of the partnership and must specify information regarding the distribution of assets and the management of obligations and debts.
The process to dissolve a business partnership can be extremely contentious or it can be a drama-free process. Either way, you need the guidance of professionals who can walk you through the various steps and make sure that it is done right. Contact our office today to set up an appointment to discuss your needs and how we can help.