question.jpgIn Business Law

How do I end a partnership?

When a partnership ends, this is known as dissolution of the partnership. It is basically where the business closes its doors, pays off its creditors, sells off it remaining assets and resolves any other remaining issues. Dissolution can be voluntary or involuntary. Voluntary dissolution would be where the partners decide, on their own, to dissolve the partnership. This is usually done by a simple partnership vote, and once they have agreed on the matter, they simply work on winding down the business. Involuntary dissolution would be where a court orders the partnership to dissolve. This typically occurs in one of two situations. The first situation is where the partnership is insolvent or in poor financial shape, and one or more of its creditors go to court over the issue. The court may dissolve the partnership, ordering it to sell off all of its assets so that the creditors can be repaid. The other typical situation of involuntary dissolution is when one or more partners want to end the partnership, but are being blocked by the other partners. They can file a lawsuit over the matter, and if the court agrees that the partnership should be ended, it will order an involuntary dissolution.