My business partner and I are having problems agreeing on finances. I would like to know how to dissolve a partnership.
Ten years ago my friend and I decided to go into business together in a construction venture. We were able to land many projects and became a successful building firm in our area. At first we only had a few small projects, but as time progressed we steadily found ourselves facing progressively larger prospects. However, despite our relative success in business, our personal relationship has suffered and we can no longer function as a team when it comes to making important decisions, especially those concerning finances. We disagree constantly. Since my business partner and I are having problems agreeing on finances. I would like to know how to dissolve a partnership.
Sometimes dissolving a partnership can be a bit of a challenge, especially when those partners are having trouble with finances in particular. However, it seems as though in your case it could be a pretty straightforward procedure according to the Partnership Act of 1890 that regulates this type of endeavour. The one thing you must be aware of is that you must stop trading immediately under your current business name.
Secondly, all outstanding business and transactions should be wound up and dealt with according to the percentage of shares you each hold in the venture. Not all ventures are a 50/50 split so this will need to be considered when paying bills and bringing in monies collected from outstanding debts. As well, any person or entity that owes you money or is owed money by you should be notified of the dissolution immediately and no more business can be conducted under the current enterprise.
Besides filing for dissolution of the partnership, it could get tricky especially where taxes are concerned because there are two distinct types of dissolution – technical and general. In a general dissolution the business/partnership would be wound up and simply cease to trade. In a technical dissolution one of the partners continues on (under the same name usually buying out the other) and continues to trade. Taxes and other financial issues can be disputed and lengthy and costly Court proceedings could ensue.
Now then, there are a myriad of legal regulations which should be complied with such as the way in which any assets are liquidated, how payouts to creditors are made, how debts are collected and how any remaining profits are distributed. As mentioned, all this can land you in Court if strict adherence to procedure is not followed. We would suggest that you get help from an insolvency specialist at Real Business Rescue to assist you through the process from agreement to dissolve right through the final steps of paying all debts and distributing proceeds.
A quick initial phone call can set you up with a free consultation and save you thousands in the process. Get in touch with us today so that you are not mired in legal entanglements. We can help.
17th May 2017 As many as one in four SMEs throughout the UK are reliant to some extent on the services of ‘gig economy’ workers, according to new research on the subject.
11th May 2017 Small companies throughout the UK could be facing a “business support black hole” in the next decade if funding currently allocated to them from the European Union is not replaced after Brexit.
2nd May 2017 The number of company directors who have been banned from leading or forming businesses for five years or longer reached a six-year high during 2015/16, according to the latest figures on the subject.
27th April 2017 A major creditor to Bolton Wanderers has issued a winding up petition against the football club in relation to a £5 million loan given to the organisation last year.
26th April 2017 HM Revenue & Customs (HMRC) officers have raided the offices of two of England’s largest and best known football clubs over issues relating to suspected income tax and national insurance (NI) fraud.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.