Any number of factors can prompt the dissolution of a business partnership, such as a dispute between the partners, failing to get a new business off the ground or shifting priorities in the partners’ lives. If you are thinking about dissolving a business partnership in New Jersey, an experienced Monmouth County business attorney can help you do it right.
Deciding Whether to Walk Away
Sometimes dissolving a business partnership is the best decision for all involved. Other times, however, a business partnership is able to continue forward with a few tweaks to the partnership agreement. Below are some reasons business partners may want to review and revise their partnership agreement or dissolve the partnership altogether:
- Partners no longer share the same vision for the business
- A partner is not upholding his or her fair share of the work
- A partner has lost interest in the business or has experienced a life change that is keeping him or her away from work
- Different management styles are causing conflicts between the partners
- Partners are not being fairly compensated based on the contributions made
Depending on the situation, business partners may decide they do want to keep working together, but under a revised partnership agreement. Sometimes partnerships are able to function efficiently and tension-free if the partners reassign management duties, redefine how decision-making happens, reallocate profits and/or redistribute ownership. But that is not always the case. Maybe it is time for a partner to be bought out, or maybe all partners are ready to call it quits and move on. When partners hit troubled waters and need to make a change, they can work with a qualified Monmouth County business lawyer to revise their partnership agreement or to dissolve the business relationship entirely.
Dissolving a Business Partnership in New Jersey
Partnership dissolution is governed by state law. In New Jersey, any business entity that is closing its operations must take steps to remove itself from the state’s tax and public records. For a limited partnership (LP) or limited liability partnership (LLP), this means filing a Certificate of Cancellation. General partners, on the other hand, will file a Request for Change of Registration Information. Several other steps will also need to be taken to wind down the business, such as:
- Reviewing current contracts and leases
- Identifying outstanding liabilities and potential tax consequences for partners
- Notifying customers, suppliers and vendors about the business closure
- Cancelling permits and licenses
- Determining the value of the business
- Liquidating business assets to pay off business debts
- Dividing remaining assets in accordance with the partnership agreement
- Filing the final partnership tax return
Dissolving a business partnership can be rather complicated, especially if disputes exist between the partners or there is no written partnership agreement. It is often best to have an attorney who specializes in business transactions draft an agreement outlining the terms of the dissolution. To ensure your business partnership is dissolved in accordance with state law and that all dissolution issue are fully resolved, contact a knowledgeable Monmouth County business attorney today.