Dissolving a Partnership

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What Are Partnership Laws?

Partnership laws govern the formation, operation, and termination of business partnerships. Partnerships form when two or more persons (or businesses) combine their resources under a single name to accomplish their business goals. Unlike other business formations such as corporations, partners usually share equally in the company’s profits, expenses, and losses. Partnerships tend to be used for smaller business efforts, although many major business activities are the result of partnership agreements.

How Is Dissolving a Partnership Accomplished?

In some cases, a partnership may need to be terminated for various reasons. For instance, the business may no longer be profitable and may need to close in order to avoid further expenditures. Or, the business may have grown so much that it needs to re-organize as a more expansive form such as a corporation. Dissolving a partnership may be necessary, and can occur:

Thus, there are many ways that a partner can signal their intent to have the partnership dissolved. In most cases, there doesn’t need to be a majority vote; if one partner cannot continue, the partnership will usually dissolve as a whole.

What Are Some Disputes Involved in Partnership Dissolutions?

Partnership dissolution can lead to many legal disputes. These can include:

In most cases, a lawsuit is required in order to settle such disputes. Remedies may include a damages award in order to help compensate a non-violating party for losses caused by a dispute.

Do I Need a Lawyer for Assistance with Partnership Dissolution? 

Dissolving a partnership can be a complex process. You may need to enlist the services of a qualified business lawyer in your area. An experienced lawyer can explain what you need to do in order to protect your assets and business interests. Also, your lawyer can provide representation in court if you need to file suit regarding a dissolution dispute. 

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Last Modified: 11-21-2013 12:40 PM PST

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