Dissolving A Partnership In Florida In 5 Steps
Dissolving a Partnership in Florida can be disappointing. However, if you are going to do it, you should do it the right way. Follow these 5 steps.
Step 1: Carefully Review the Partnership AgreementBefore deciding to dissolve a Partnership and choosing a way to do it, you must first check your partnership agreement or any other legally binding business documents you have signed, as the steps you must take to dissolve your Partnership may be outlined in those documents. If your partnership agreement already addresses how dissolution should be handled, you must follow the steps outlined in the contract.
However, if dissolution is not properly addressed in your partnership agreement, you must proceed with the following steps.
Step 2: Decide What Will Happen NextWhether your Partnership is being completely dissolved or one of the partners is going to take over the business after the others leave, all partners should get together and decide how the business assets and debts will be divided upon dissolution, making sure this division is fair.
Step 3: VoteFor larger businesses with a board of directors and shareholders, you will need to take a vote in order to determine whether the Partnership should be completely dissolved. In many partnership agreements, the majority is enough to decide how to proceed.
In case of a tie, you should refer to your partnership agreement. However, if it does not tell you what to do, you should refer to the Revised Uniform Partnership Act. This Act will help you determine how to proceed if your partnership agreement does not contain this information.
According to the Act, a partnership may be dissolved if one of the partners decides to leave. The only time that a Partnership is not dissolved is when the remaining partners choose to continue doing business without the departing partner.
Step 4: Fairly Divide Business Assets and DebtsYou can think of this phase of the process as “wrapping up business.” At this point, you will need to sell off assets, fill any outstanding orders, and pay business debts. After that, if any assets or debts remain, you must divide them in accordance with the agreement you reached with your partners in step 2.
Step 5: Notify Everyone about the DissolutionAlthough filing a form with the state to let them know that your Partnership has been dissolved is not mandatory, it is still a good idea to make sure everyone knows about the dissolution to avoid potential confusion and misunderstandings in the future.
The first thing you should do is file a Statement of Dissolution with the Division of Corporations (DOC) of the Department of State. Then, you should notify any other parties who have entered business contracts with your Partnership. This includes suppliers, vendors, customers, lenders, etc.
If you decide to close your business completely, another important entity you should notify of the dissolution is the Director of Revenue (DOR) by filing a notice once your business is wrapped up. This will help ensure that all your business taxes are in order before moving on.