Protecting Your Interests in a Partnership Dissolution

It’s not uncommon for partners in a business partnership to go their separate ways. Sometimes, the situation is forced upon one or more partners due to external circumstances. No matter what the circumstances are surrounding the dissolution of your business, it’s imperative to understand—and protect—your interests. Even with a well-crafted and comprehensive partnership agreement in place, emotions can get tested and relationships strained during this difficult time.  

If your partnership, for whatever reason, is considering a dissolution in or around Los Angeles, California, contact us at Lerner & Weiss. As business dissolution attorneys, we’re ready to guide you through the process and help you achieve the best possible outcome. 

Partnership dissolutions are a fact of life, but they don’t need to be messy. We proudly help businesses resolve complex disputes and move forward with confidence. If you are located throughout Los Angeles, as well as Woodland Hills, San Diego, Ventura County, Santa Ana, and the Greater Los Angeles area, get in touch with our team. 

Common Reasons for a Partnership Dissolution

Many factors can play into a dissolution decision. Of course, one of these is that the market doesn’t support your enterprise, or it did but now it doesn’t because of the introduction of new products, services, or technology that renders your business outdated. 

A competitor may emerge who takes your market share, and you struggle to catch up and keep falling short. Pretty soon, you have obligations and no way to fully cover them. Dissolution may be the only answer. 

Other factors can also play a role in the dissolution of a partnership, including: 

• Differing levels of effort by each partner may put some at loggerheads against others and tear apart the fabric of the enterprise. 
• Strained personal relationships may also lead one or more partners to question the worthiness or survivability of the enterprise. 
• One partner may decide he/she has had enough and decides to retire or take a job elsewhere. 
• Disagreements over strategy can also lead to a rift. One partner may see one route to take for the business, and another partner may have a different vision. 
• The financial picture, outside of competition, may become overbearing as well. Debts and obligations may get out of hand. There may be unmet tax obligations, or even a depletion of assets. 
• Lawsuits can pay a part, too. If you sign contracts, you may find yourself having to confront a breach of contract on the other party’s side, or they may confront you for breach. 
• If you have employees, you never know if one or more of them decide you’ve broken some employment law, and soon government agencies—and eventually lawyers—may be challenging the way you operate, seeking damages or recompense. 

No matter what has occured in your business, it’s important to contact a business lawyer who can protect your interests at every stage of the process. 

The Process of Partnership Dissolution

The best safeguard to facilitate a smooth dissolution is to have all the steps planned out in advance in your partnership agreement. Absent a partnership agreement, general partnership law applies, as codified in various codes. 

Without a partnership agreement, you will have to try to work out the details among the partners in as amicable a way as possible. You will no doubt, in either situation—agreement or not—need to seek professional counsel to guide you through the process. 

In California, you must file a Statement of Dissolution with the Secretary of State. The agreement should be witnessed or notarized to affirm its legal status. Other vital steps include: 

• Canceling any outstanding permits, business licenses, and any other official registrations 
• Notifying creditors, vendors, suppliers, and customers/clients that the partnership is being dissolved 
• Publishing a notice of the dissolution in a paper of “general circulation” for 12 consecutive days 
• Paying all taxes and canceling your tax accounts and tax IDs 
• Reviewing all contracts, leases, and business agreements you have in place 
• Canceling all bank accounts 

Remember, once a partnership has been dissolved, no partner may transact business in its name. Again, your safest route is to do all these steps with the guidance of an experienced business dissolution attorney. An attorney can help you fully understand your rights and help you protect these rights when you need it the most. 

You Deserve Personalized and Experienced Guidance

If your partnership in the Greater Los Angeles or surrounding areas is on the verge of dissolution, contact us immediately at Lerner & Weiss. We will assist you with all the steps outlined above and will go the extra mile to cover any issues that may otherwise prove elusive or too difficult to deal with on your own. Most importantly, we will strive to protect you and your business from any future litigation. We have offices in Woodland Hills and San Diego to better serve you wherever you are in the counties of Los Angeles, Ventura, Orange, and San Diego.