Everything eventually comes to an end. For a business partnership, that end can come because of a dispute, a retirement, a death or simply because the partners wish to re-form their business as a limited liability corporation. Regardless, business partners need legal representation to ensure that their rights and financial interests are protected throughout the dissolution process.
Partnership Dissolution Requirements under California Law
The California Revised Uniform Partnership Act (RUPA) sets the rules for partnership dissolution. All dissolving California partnerships have three basic legal obligations:
- A statement of dissolution must be filed;
- All affected parties must be adequately notified, this includes creditors, suppliers and in many cases even the customers; and
- Legal notice must be published and circulated for at least 12 business days.
Ultimately, these requirements are meant to ensure that partnerships are not dissolved in secret, thereby leaving affected parties in the dark. An experienced business dissolution attorney can make sure that you meet all of these basic legal requirements.
Dissolving a Partnership on Disputed Terms
The partnership dissolution process may not be too difficult when a partnership ends amicably. But, unfortunately, disputes sometimes arise. If you are ending a partnership on disputed terms, an attorney is especially vital. Important considerations include:
- The partnership agreement: A well drafted partnership agreement should contain provisions for disputes and dissolution. It will likely establish your rights and your responsibilities as a dissolving partner. If the provisions are not clear, or you believe that your partner has not fulfilled their legal obligations, you should contact an experienced partnership dispute attorney immediately.
- Understand your duties: You should perform all of the duties obligated under the partnership agreement. Do not leave any loose ends. It will be more difficult to dissolve the partnership if there is still unfinished business. Even more important, in the case of a dispute, the resolution will likely be much less favorable for you if you have unfulfilled duties.
- Know the value of the partnership: You need to have a clear picture of the value of your partnership. This includes all of the assets and all of the liabilities. An adequate business valuation should be comprehensively and extremely detailed. You deserve to receive your fair share from the partnership, and the first step is knowing the precise value. This allows you to negotiate from a position of strength.