If you are a business owner, it is possible that at some point you might need to dissolve your partnership. Whatever has occurred, you want to make sure this process is quick and efficient, so you don’t incur major financial losses while doing so. A small business lawyer Chicago Illinois will provide you with clear, concise, and consistent advice that leads to optimal outcomes for you as you dissolve your business. Contact The Law Office of David Hyde today at 312-210-9598.
If you have ever been involved in a partnership and have realized that it’s time to leave it, there are several important things to consider. For example: What will happen with the assets? Will the remaining partners pay off their debts? How do you handle disagreements between parties? These are just some of the questions that must be answered when dissolving any type of business partnership. There are important steps that should take place when dissolving an Illinois business partnership so everyone is satisfied with the outcome.
Review partnership agreement
Ending a business partnership in Illinois can be difficult. Some business partnerships end because one or more partners are not pulling their weight or there are interpersonal conflicts or incompatible goals. When a partnership is no longer serving the best interests of the parties involved, the best option may be to dissolve the partnership entirely. The dissolution of the partnership may also be triggered by a partner retiring or choosing to pursue another business venture.
Whatever the reason, the first step in dissolving a partnership is to review the partnership agreement. If you haven’t reviewed it in a while, you need to re-familiarize yourself with the terms of the agreement. Does it provide a way to dissolve the partnership? If not, you may need to draft this clause yourself or consult with a small business lawyer Chicago Illinois about adding one in.
Does it provide a way to divide assets upon dissolution? If not, again you may need help from an attorney who can draft such provisions. It is important in these instances to work with the other business partner(s), so that everyone is involved and will be happy with the outcome.
Dividing Assets and Debts
After you’ve decided to dissolve your partnership, there are several ways to divide the assets and liabilities. You will need to determine who is responsible for them and at what percentage. Both parties may have agreed beforehand about how profits should be split amongst themselves when one leaves early versus later on down the road. Those terms should be spelled out clearly enough so no hard feelings arise when things aren’t going according to plan. Both parties need to agree upon dividing up intellectual property rights as well.
When deciding how best to handle outstanding debts after dissolving a partnership, consider whether doing so would benefit everyone involved. Or, would it cause more problems in the long run? For example, if one partner owes another $10K but doesn’t have enough cash flow left over to pay out liabilities, it may be best to put that money towards business debt.
If you own a corporation, you may have other options. You can dissolve the corporation and distribute its assets to shareholders. You may be able to sell the business as an entity or transfer ownership of it to another person or group. There are many ways that assets and debts can be divided and a small business lawyer Chicago Illinois can help you end your partnership legally and amicably.
File necessary documents
When you and your partner have decided to go your separate ways, the next step is to file with the state for a tax clearance. This ensures that both parties have paid all their taxes and met any other obligations associated with closing out their business relationship.
A tax clearance is an official document from Illinois Department of Revenue stating that all required payments are made up until a specific date. It also says how much money has been collected by them from businesses like yours during that time period. If you don’t file within six months after selling or liquidating all assets related to this business venture then penalties will apply and since these can add up quickly over time we highly recommend getting started sooner rather than later.
While you can file on your own, a small business lawyer Chicago Illinois can make sure you’ve addressed all tax liabilities. Your business is unique and you need a business attorney that can provide you with advice and support tailored to your specific needs. Contact The Law Office of David Hyde today for a consultation.
Notify stakeholders
After you’re ready to dissolve your business partnership, you should notify stakeholders. This includes anyone who is owed money by the company, such as suppliers and contractors. You may also want to notify any banks or other financial institutions that have lent money to the business. If there are outstanding debts, it’s important that these creditors are notified so they can make arrangements with each other before any assets are sold off at auction or liquidated by law enforcement agencies like the IRS (Internal Revenue Service).
Contact our small business lawyer Chicago Illinois to help you dissolve your partnership
When dissolving a partnership, it is best to have a small business lawyer Chicago Illinois to help with the process. The Law Office of David Hyde will assist you with the paperwork and legal aspects of dissolving your partnership. We will do a thorough evaluation of all existing agreements, assets and liabilities, and tax implications of dissolution to ensure you are taking the most effective approach to dissolving your partnership. Contact us today for a consultation.