Dissolving Business Partnerships
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Dissolving business partnerships can be emotionally taxing and overwhelming for the parties involved. Especially if the success of the business is at stake, as well as employees relying on it for livelihood.
Unfortunately, there comes a time when it simply is inevitable for business partnerships to break apart. However, it’s not just a matter of removing someone from the partnership or dissolving the business altogether.
In Illinois, there are specific factors that must be taken into consideration when business partnerships are going to be dissolved. Therefore, it is crucial that you seek the help of our Chicagoland business lawyers as soon as possible, we know the legal considerations to follow.
Dissolving Business Partnerships in Illinois
The first thing that business partners must do is to file a statement of dissolution with the Illinois Secretary of State. This kicks off the process of closing the business and the partnership. The next step is to determine what assets there are, and how this will be divided between the partners.
Before determining who gets what, however, it is crucial to make sure that these assets will be used to pay off any existing business debts. All contractual obligations must be fulfilled, or otherwise terminated accordingly, to ensure that all business transactions are accounted for. In this regard, an Illinois business transaction attorney can most certainly help in the settlement and organization of things.
In cases where there are more than two business partners involved, the division of assets may become testy or tumultuous. However, if there is a strong and binding partnership agreement, the entire matter could be simply resolved by acting in accordance with this agreement. Should there be anyone contesting any part of the agreement, it is ideal to seek the help of a business mediation attorney in Chicago.
Factors to Consider
Among the factors to consider in dissolving business partnerships is the impact of this dissolution on your liability. Typically, partners are personally liable for any debts and obligations acquired throughout the partnership. That’s why it’s important to first determine the assets of the company before liquidating and distributing the same.
The business registration must also be finally canceled within a reasonable period of time. This entails sending notice to other businesses your company is transacting with, as well as your own staff and clients. Any outstanding business orders or receipts must be closed and taken care of. It is the responsibility of the business partners to tie up the loose ends in their business, otherwise they run the risk of being chased down for the obligations they abandoned. Chicago Business Attorneys can help provide the legal support and counsel to address this particular need.
Who Gets What from the Assets?
As mentioned earlier, the foremost obligation is to the creditors. Anything else left after payments are completed will then be divided among the partnership. Beyond that, the partnership agreement, which is expected to contain specifics for this particular scenario, should be adhered to.
However, the value of contribution given by each partner throughout the partnership will also be considered, and so can also impact the amount to be received by the partners. This should be computed in proportion to the efforts extended to the betterment of the business, among others.
In case the partners are unable to come to an amicable conclusion regarding the distribution of assets, a Chicago business mediation attorney can most certainly help settle the matter, either at the negotiating table or before the courts.
Your attorney can help mediate the transition
If you are considering dissolving a business partnership, seek counsel from a Chicago business lawyer such as Anthony J. Madonia & Associates. They can assist with the transition of the company, and help ensure that your interests are well protected amidst the dissolution.