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Dissolving a business partnership can be a tricky process. Doing incorrectly can lead to hard feelings and even legal trouble. However, if done on good terms, both parties can walk away feeling satisfied. Our New Jersey business law attorneys discuss how to dissolve a business partnership amicably.
Why Partnerships Dissolve
According to The 5 Nonnegotiable Factors of Any Successful Partnership in Inc., 50 to 80 percent of business partnerships end in divorce. The reasons for the dissolution of a partnership are as varied as the types of businesses that form partnerships. Some common reasons for dissolving a business partnership include the following:
- One partner wants to retire or move on to a new venture
- The business has not been successful, and both partners agree it is time to disband
- Differing opinions and goals among the partners
- Financial troubles or mismanagement
Preparing for Dissolution
Before beginning the process of dissolving a business partnership, it is vital to have a clear plan in place. This includes taking inventory of all business assets and determining how they will be divided or sold. It can also be helpful to review the original partnership agreement to ensure that both parties follow the outlined terms for a dissolution.
Communicating with Your Partner
When dissolving a business partnership, transparent and open communication is key. It is essential to have a frank discussion with your business partner about the reasons for dissolution and to agree on moving forward with dissolving the business.
Next Steps
Once the decision has been made to dissolve the business partnership, several steps should be taken to close the business officially. This includes:
- notifying vendors,
- customers,
- business contacts of the dissolution,
- filing the necessary paperwork with state and federal agencies.
Creating a checklist and timeline for these steps can help ensure the dissolution process goes smoothly. A lawyer or facilitator can help create a plan for dissolution and ensure that all legal requirements are met.
Moving Forward
While dissolving a business partnership can be difficult and even emotional, it is often necessary for both parties involved to succeed and grow. Following these steps and communicating openly with your business partner can dissolve the partnership on good terms and move forward toward new opportunities.
How M. Ross & Associates, LLC Can Help
At M. Ross & Associates, LLC, we have experience guiding business owners through the dissolution of partnerships. Our team can help with the necessary paperwork and ensure that all legal requirements are met. Contact us today to learn more about how we can help dissolve your business partnership.
Contact us today at (201) 897-4942 to schedule an appointment with our business attorneys!