Partnership dissolution refers to the act of terminating or winding up a partnership. Dissolving this entity is a significant decision that will affect each of its members. At Stok Folk + Kon, we understand the financial concerns that surround these matters, and our capable commercial litigation lawyers will advocate zealously for your rights in Fort Lauderdale and the surrounding areas. We proudly represent clients from Hollywood, Fort Lauderdale, and across Florida.Implications of Terminating a Partnership
A partnership is created when two or more people mutually agree to conduct a business together for profit. This can happen even when there is no formal intent or written agreement to form such an entity. While general partnerships are not subject to any specific requirements, they do need to comply with the basic registration, filing, and tax rules that pertain to any Florida business.
Dissolution is the official end to the existence of a registered business, which puts it beyond the reach of creditors and claimants. A partnership can be dissolved by consent of all the partners involved, by agreement in accordance with the partnership deed, by notice from one partner to the others, through bankruptcy, or by a court order. There also may be an external event that leads to dissolution, such as the death of a partner.
In these situations, each partner is entitled to have partnership property applied to pay outstanding debts owed by the entity. Each partner also has the right to collect a share of the surplus profits, if there are any, that is proportionate to his or her interest in the company.
When it comes to voluntarily dissolving a business, partners should initially consult any documents that contain rules for how to terminate it. If a procedure for dissolution is outlined in the partnership agreement, that procedure controls. If dissolution is not discussed in the partnership agreement, the parties are free to come up with a separate agreement on how to handle this process.
Dissolving a business partnership is governed by state law. In Florida, after an event occurs that triggers the end of a partnership, a certificate of dissolution must be prepared in compliance with state law and filed with the Florida Department of State. The certificate must be signed by all general partners or a person appointed under the statute. It must include the name of the partnership, the date of filing the certificate of limited partnership, and the reason for filing the certificate of dissolution.
After taking this step, partners need to engage in a process often referred to as “winding up.” This consists of collecting the company’s assets, disposing of company property that will not be distributed in kind to those involved, discharging company liabilities, and paying creditors. Under Florida law, you are not required to obtain tax clearance before dissolving a partnership.Dedicated Representation for Commercial Litigation in Fort Lauderdale
Partners seeking knowledgeable advice on how to end their entity should consult the business attorneys at Stok Folk + Kon. As we work through your case, our Fort Lauderdale lawyers will stay committed to keeping you informed every step of the way regarding your business dissolution matter. You can expect the utmost professionalism from our entire team. We will assess the merits of your case and discuss all your legal rights and options in the detail that you need. To learn more, call (954) 237-1777 or contact us online to arrange an appointment.