How to Dissolve a Business Partnership in Illinois

Business partnerships consisting of two or more individuals or entities are a great way to access a wider range of knowledge, increase profits, and expand market reach. However, there may come a time when the partnership ends. Whatever the reason for the termination of the partnership, dissolving a business partnership in Illinois can be challenging. However, with proper planning and execution, it can be done relatively quickly and efficiently.

What to Do If You Want to End Your Business Partnership

When a partnership is no longer serving the best interests of the parties involved, the best option may be to dissolve the partnership entirely. Some business partnerships end because one or more partners are not pulling their weight or there are interpersonal conflicts or incompatible goals. The dissolution of the partnership may also be triggered by a partner retiring or choosing to pursue another business venture. Some partnerships end because the relationship was designed to be temporary from the beginning and the partnership has fulfilled its purpose.

Ending a business partnership involves severing the legal relationship between the partners. It may be tempting to simply walk away from the partnership and hope for the best, but this can result in legal entanglements and financial loss. The following are some of the key steps to take when ending a business partnership:

• Review your partnership agreement – Most operating agreements and partnership agreements contain rules for how to dissolve the company. If there are no provisions describing the dissolution process, you will need to work with the other partners to determine the best way to move forward.
• File the Articles of Dissolution with the Secretary of State – The Articles of Dissolution is a document that must be filed with the Secretary of State in order to officially dissolve the partnership. This document contains information about the business, such as its name and address, and states that the partnership has been dissolved.
• Discharge liabilities and pay creditors – Once the partnership is dissolved, any remaining debts must be paid off. The partners should work together to determine which debts are owed and who is responsible for paying them.
• End contracts, leases, and insurance policies – Review these documents and follow the termination terms. You may need to pay fees or taxes to terminate a contract early.
• Close accounts and liquidate assets – This may involve selling off equipment, real estate, vehicles, and any other property owned by the partnership.
• File final tax returns – The partnership is responsible for filing a final tax return and paying any taxes due.
• Notify customers and suppliers – All customers and suppliers of the business need to be notified that its partnership has been dissolved.
•  Make distributions to partners – After all of the above steps have been completed, any remaining partnership funds must be distributed fairly to the partners.

Call Us for Help

Dissolving a business partnership requires careful planning and execution to ensure that all the legal requirements are met. The Naperville business law attorneys at the Gierach Law Firm can provide the assistance and legal support you need to dissolve your business properly. Call 630-756-1160 for a confidential consultation.

Source:

https://www.investopedia.com/terms/g/generalpartnership.asp