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Questions and Professional Answers

Questions and Professional Answers

  • Dissolving an unfiled partnership

    My partner and I are dissolving our business relationship. The dissolution is amicable and she wants nothing to do with the business. We never filed a partnership with CA, but I was told I needed to file for a dissolution of partnership before I could set up a corporation. Why would I need to do this if we never filed? Can't I just remove her name from the business license and tax id?
    • Re: Dissolving an unfiled partnership

      You cannot file either a Statement of Dissociation (Secretary of State Form GP-3) or a Statement of Dissolution (Form GP-4) unless the partnership has previously filed a Form GP-1 Statement of Partnership Authority. See the instructions for each of these documents on Page 2 of each on the SS's Web site at www.ss.ca.gov.There are several ways that a corporation can continue the business of a general partnership. Perhaps the easiest is to form the corporation, then have each former partner transfer his or her interest to the corporation. In return, the corporation would give shares of stock to whomever wants to stick with the business, and money to whomever doesn't. The money, in turn, would be provided to the corporation as an investment (stock purchase or perhaps loan) by the partner that wants to continue.All of this is pretty technical and fraught with legal pitfalls. You should have a lawyer explain and document each step. In any event, be sure of three things: (1) that the breakup is essentially fair to both partners, money-wise and otherwise; (2) that everything is set down in writing and signed off upon by both; and (3) perhaps most important of all, ALL partnernship obligations (supplier and employee debts, tax filings and payments, etc.) are handled.You might also want to skim the California version of the Uniform Partnership Act of 1994, which begins at Corporations Code section 16100 and runs through 16962. Of particular interest should be the sections dealing with dissociation, dissolution, windup, termination and conversion, which tend to be in the 16601-16901 series of chapters.

      Bryan Whipple
      Bryan R. R. Whipple, Attorney at Law
      P O Box 318
      Tomales, CA 94971-0318
  • Dissolution of General Partnership

    Is a general partnership dissolved upon filling the complaint pursuant to ss 5 of RUPA 801 and does the partnership only continue for the sole purpose of winding up the partnership. Also, is the partner dissolving the partnership entitled to legal costs? Thank you.
    • Re: Dissolution of General Partnership

      Dissolution events under the RUPA often depend upon the language of the partnership agreement. Many events that formerly triggered dissolution no longer do, at least not automatically.With respect to the provision you cite, which is codified as Corporations Code section 16801(5) in California, I would interpret the provision to mean that dissolution must await the judicial determination applied for, and does not occur upon the making of the application. However, I believe a judge could, upon a proper showing, rule that dissolution actually occurred at an earlier date due to facts showing some triggering event.Dissolution is the first step in a process that begins with an event causing dissolution and ordinarily ends with the winding up and termination of the partnership. The main legal impacts of a dissolution are upon the authority of partners to bind the partnership and their liability for subsequent partnership debts.A partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up is complete. Corp. Code section 16802(a).For authority of the person winding up a dissolved partnership, see Corp. Code 16803(c).There is a form which may be filed with the Secretary of State (Form GP-4) which serves as notice of the dissolution and after 90 days relieves the (former) partners of new liability for partnership debts. See Corp. Code section 16805.It looks to me as though one could fairly infer from Corp. Code 16806(b) that legitimate expenses of winding up, probably including reasonable attorney fees, would be chargeable to the partnership and hence deductible from any distributions made to the (former) partners.

      Bryan Whipple
      Bryan R. R. Whipple, Attorney at Law
      P O Box 318
      Tomales, CA 94971-0318
  • Dissolving a Restaurant Partnership

    I am dissolving a partnership in a restaurant. I have developed 90% of the menu and recipes. I want to have my name removed from the business all together and would like to have them to stop using my recipes. What is the best course of action to achieve this? Thnk you.
    • Re: Dissolving a Restaurant Partnership

      This may depend on your partnership agreement. An attorney could assist you in drafting a sales contract that would provide for these issues.

      Robert Strupp
      Robert J. Strupp,Attorney at Law, PLC
      2325 Dulles Corner Drive Suite 500
      Herndon, VA 20171
  • Dissolving a partnership

    I've been involved in an LLC Partnership for the last 4 years. I'm now having some personal issues with my business partner, and would like to end the partnership. I would like to remain in the same business, and retain our most prominent client. Are there any issues I should be aware of? What is the easiest way to get out of a partnership?
    • Re: Dissolving a partnership

      If you truly are in a partnership, then it must be dissolved by law if you leave. If it is a company LLC then you can write an ending to it if you agree on all these other issues.

      Joseph J. Jacobs Jr.
      The Jacobs Legal Group
      15614 Detroit Avenue
      Cleveland, OH 44107
    • Re: Dissolving a partnership

      First of all the operating agreement should state what should happen in the case of the dissolution of the LLC. There is no problem remaining in the same business as long as there is not a covenant not to compete. As far as taking the customers that should be spelled out in the agreement terminating the LLC.Good Luck!!!!Gregg Manes

      Gregg Manes
      Gregg A. Manes, Esq.
      333 South Main Street #701
      Akron, OH 44308-
  • Dissolving a Partnership

    Hello,In 1999 my brother-in-law and I formed a general partnership. Unfortunately, the business was unable to support both of us, so he decided to continue in it and I left to find another job. Legally, what must be done to change this partnership to a sole proprietorship? Is there a simple form to file with the county clerk?Thanks much for any help!
    • Re: Dissolving a Partnership

      You and your brother-in-law will have to go to the county clerk's office and withdraw the assumed name certificate you both signed. Then he will sign a new assumed name certificate naming him as sole proprietor. Until you do that, you are showing the world that you are also responsible for debts and obligations of the business.

      Peter Bradie
      Bradie, Bradie & Bradie
      6606 FM 1488, Suite 148-363
      Magnolia, TX 77354-2544
  • Dissolving a Partnership

    I am an Accountant and am trying to give my client good sound advise. She and her sister formed a partnership to teach yoga. They have no employees working for them. One sister recently married and is moving to California from New York City. They want to change the Partnership agreement to a Sole Proprietorship. What is the best wat to handle this. Have the married one Withdraw from the partnership or dissove it?
    • Re: Dissolving a Partnership

      You, as an accountant, probably know that New York law provides that commonlaw partnership is broken as easily as it is made: the sisters would have to merely stop holding themselves out as partners, and would have to notify current and potential clients of the breakup of the partnership. However, you indicate that there is an agreement in place between the sisters. This complicates things, since such agreements can and often do override the default provisions of law. Without knowing the provisions for dissolution and winding-up that may be present in the agreement, it's not possible to discern the "best" way to handle the situation.The best advice you could give your clients is to take the written partnership agreement to a business lawyer and ask him/her for advice on dissolution and winding up based on that agreement.If there is no WRITTEN agreement in place, then the New York default rules apply (even if the sisters think they have a different agreement).I would want the surviving partner to form a business entity with a bit more backbone than just a sole proprietorship. Teaching yoga can get students literally into knots, and knotted-up people tend to be unhappy and therefore litigious. This could lead to way too much personal liability. I'd have the surviving partner form at least an LLC to limit personal liability.THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

      Nancy Delain
      Delain Law Office, PLLC
      107 N. College St.
      Schenectady, NY 12305
  • Dissolving a partnership

    My brother and I own a landscaping company. Recently my brother is not returning phone calls or messages and has been taking jobs on himself and collecting the money without my knowlege. He has also taken the Bobcat trailer title (only large piece of equipment we fully own) and took a personal loan out against it without my knowlege. The company has far more debt than assets at this time. How do I go about dissolving this partnership and take on the company in just my name? Especially since he will not contact me? He is also using the company name to ''charge'' items to do these jobs he's doing behind my back with someone else.
    • Re: Dissolving a partnership

      If it is a true MN Partnership then you will have to either do a voluntary or statutory dissolution. I have 35 years business law experience. Call or email for more assistance.

      David Anderson
      Mahoney Anderson LLC
      P.O. Box 44504
      Eden Prairie, MN 55344
  • Partnership Dissoultion

    I am a painting contractor. I carry the contractors license.I am dissolving a partnership with one person. After I file adissoultion of partnership notice can he continue to use my state contractors license? Thank You
    • Re: Partnership Dissoultion

      Once dissolved. The other person can NOT use your license. If they do, then they can be reported to the Contractor's State Licensing Board as an unlicensed contractor. Further, you will have a personal claim against them for this violation.I have several contractors as clients and have dealt with similar issues before. If you would like additional assistance, or if this person does use your license after separation, please feel free to contact me at the number provided by LawGuru or through one of my firm's many websites such as RulesofEmployment.comScott Linden

      Scott Linden
      Scott H. Linden, Esq.
      1510 Cotner Ave
      Los Angeles, CA 90025
    • Re: Partnership Dissoultion

      When a partnership holding a contractor's liceense splits into multiple sole ownership businesses, a new license is required in each case. Contractor's Licenses are associated with the business and not necessarily the qualifier.You should file the contractor's state license board that you are no longer associated with the partnership's license.

      Carl Starrett
      Law Offices of Carl H. Starrett II
      1941-C Friendship Drive
      El Cajon, CA 92020-1144
    • Re: Partnership Dissoultion

      When you formed the partnership, you likely filed with the Contractors State License Board, indicating that you were the RMO/RME licensing the business. (The business would have a license number differing from your individual license number.) You should make the filing required at the CSLB to dissociate yourself from the partnership (that cancelling the partnership license). Your (former) partner cannot use your individual license and would not be able to work under the partnership license number (which would be deactivated without a RMO/RME).If you require assistance in this regard or need further information, please contact me.

      William (Bill) Bresee
      Law Offices of William F. Bresee
      200 N Glendora Avenue, Second Floor
      Glendora, CA 91741-2670
  • Dissolving Partnerships

    Three partners own one rental property. One wants to leave partnership. Can the other two force him to stay? What steps are needed to dissolve the partnership in the state of PA?
    • Re: Dissolving Partnerships

      You asked about dissolving a partnership.This is a complicated area governed by the documents you collectively signed and by the law to "fill the gaps" where the documents did not properly deal with the issues. You will probably not find a clear answer no matter what side you are on.Depending on what side I represent I can always come up with arguments for my client's position and arguments against my opponent's position. That's a lawyer's job.You need to speak with a lawyer to determine the best (most effective and economical) course of action given the circumstances.Regards,Roger

      Roger Traversa
      Arjont Group (Law Office of Roger Traversa)
      P.O. Box 1932
      Philadelphia, PA 19105
  • Disoulution of partnership

    I am currently in the process of dissolving a business partnership. We have both agreed to this dissolution, yet my partner has been unavailable and has ignored my attempts at communication. My first question concerns what time frame you would consider reasonable before it is legally considered "abandonment of partnership," and I am no longer legally bound to the contract of our relationship.What legal remedies do I have?
    • Re: Disoulution of partnership

      The important question, of course, is what a judge would consider "reasonable." This can vary widely depending upon the circumstances, the wording of the partnership agreement and the personality of the judge you draw. If you think your partner is being unreasonable, you may be able to convince a judge that you are right.You may have a cause of action for breach of contract. Call me at (650) 938-3536 to discuss your case in more detail.

      Timothy J. Walton
      Internet Attorney
      1896 San Ramon Avenue

      Timothy J. Walton
      Internet Attorney
      801 Woodside Road, Suite 11
      Redwood City, CA 94061