When people in Colorado join together to form a business, it is rarely with the intent to dissolve the venture in the future. However, there are many reasons that a partnership may end, such as retirement or simply because a partner determines that the business is no longer a priority. At this point, there are certain legal issues to consider.
Upon entering a partnership, a legal agreement is typically made between the entities involved in the business. The first step for anyone in determining how to end or change his or her business relationship is to revisit this agreement and review the options available. At times, a complete dissolution is not necessary, and one’s goals can be obtained by simply adjusting the weighting of the partnership. In this way, a less-committed entity could remain involved but relinquish some control over financial or other decisions.
True dissolution of a partnership is governed by each state’s laws, so it is important to review with an attorney or research the matter to understand the process unique to the state. In broad strokes, the process generally renders the partnership agreement void. Additionally, it ensures that partners will only be responsible for their own liabilities and debts, and after dissolution, that neither partner can make any binding transactions on behalf of the partnership.
When dissolving a partnership, no circumstances are exactly the same from business to business. Most in Colorado seek the counsel of a business law attorney in order to ensure that they are protected when seeking to change or dissolve a partnership agreement. Attorneys experienced in this area of law will be in the best position to ensure that their clients achieve their goals and that an agreement change or dissolution ends in the most equitable outcome.