How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask BartEsq Your Own Question

BartEsq
BartEsq, Researcher
Category: Business Law
Satisfied Customers: 1506
Experience:  Juris Doctor
Type Your Business Law Question Here...
BartEsq is online now
A new question is answered every 9 seconds

Hi, What kind of paperwork is needed to dissolve a partnership?

Customer Question

Hi,
What kind of paperwork is needed to dissolve a partnership? Do we have to use an attorney? We are just a partnership and not a corporation. Also she and her husband will be buying me and my husbands shares. If we end up taking payment from them, what kind of paperwork is involved in that?
Thank you
Shelley
Submitted: 1 year ago.
Category: Business Law
Expert:  BartEsq replied 1 year ago.

BartEsq :

Hi, my name isXXXXX going to try and help.

BartEsq :

So this is a 4 way partnership? Is the salon and boutique the same store? Is the business registered with the state?

BartEsq :

And what state is the business in?

Customer: Hi,
BartEsq :

Hi,

BartEsq :

Are you having problems with the website?

Customer: Actually the partnership is between me and my partner. Our husbands just happen to be on the lease, which we( my husband and I)are not able to get off and there is 5 years left on the lease. Part of the sale will include a letter of release( held harmless clause) provided by them. It is in one building and under one name but it is a salon/ boutique
BartEsq :

Ok. What state are you in?

Customer: Oops I was still typing it is in San Clemente California
BartEsq :

Selling an interest in a partnership is different than dissolving a business. Is the business registered witht the state?

BartEsq :

Are you there?

BartEsq :

Having problems with the site?

Customer: I believe so. We have a tax ID number and a state board license as well as a business lisence and sellers permit.
BartEsq :

As far as the lease goes, you can ask the landlord for early termination or early buyout. If the landlord is not budging on a buyout or early termination, you could just walk away from the lease, but if you do that, the tenant who signed the lease (your mom) and any guarantor would be liable for the rent for the rest of the lease or until the landlord finds a new tenant. This isn't quite as bad as it sounds because the law imposes upon landlords a duty to mitigate damages. That means your landlord can't just sit back and collect your rent but has an affirmative obligation to try to find another tenant to lease your place. If the new tenant pays the same or higher rent, you're off the hook. If the new tenant pays less rent than required by the lease, however, your landlord will claim you owe the difference over the term of the lease and you'll be forced to pay it.


But what if your landlord isn't all that motivated to find a new tenant? Since you're still liable on the lease, there's no real benefit to them to put out any extra effort to find another tenant. In that case, you'd want to try to locate a new tenant yourself to assume the lease obligations. To prepare for this situation, your lease should contain a provision that says your landlord can't unreasonably refuse to consent to a new tenant. This means that if you present a new tenant who's financially sound and experienced, your landlord can't arbitrarily refuse to sublease to the new tenant.

BartEsq :

Commercial leases do not get the same protection as residential leases. Check the lease for early termination clauses too.

BartEsq :

As far as the business is concerned, a simple contract is all you need to tranfer ownership. You can write it on a napkin. A simple sales contract. Then the buying partner can dissolve the business entity and reorganize. Otherwise, if you dissolve the business now, you would get your half of the value and the partner would need to reestablish a nes business entity to continue the same business.

BartEsq :

At this point, I would suggest a simple sales contract for your partner to purchase your interest in the business.

BartEsq :

Any questions Shelly?

BartEsq :

Here is a link to the CA secratary of state information for converting business entities to a new business entity.

BartEsq :

If you are jsut selling your interest in a partnership, I dont think any conversion is needed.

Customer: We already know the landlord will not let us off. My partner is staying and running the business on her own. So we will have to remain on the lease.. That is why they said they would get the letter of release. Do you feel a letter of release s nessesary?
BartEsq :

Not neccessary, but would help you sleep better at night if the lease ever defaults.

BartEsq :

Anything else I can help with?

BartEsq :

Still there?

BartEsq :

Did the two of you have a written partnership agreement intitially?

BartEsq :

Let me know if youre still there or else Im just waiting around for you respond.

Customer: Sadly no.. Just jumped right in:)
BartEsq :

Ok, gotcha.

Customer: Sorry I'm working too
BartEsq :

Yeah, if you search for "buy-sell" agreements, you can find genaric contracts.

BartEsq :

No problem, just wasnt sure if there was a tech problem or not.

Customer: Haha I know I've got my I phone and my I pad going and I'm coloring hair:)
Customer: Also wondering about if we finance their balance if we let them make payments to us
BartEsq :

Nice job.

Customer: Do you have access to buy ell agreements or do I just google?
BartEsq :

Just google. I dont have any made already.

BartEsq :

Here is a decent sample.

BartEsq :

Is there anything else I can do for you?

BartEsq :

Was the service Okay?

BartEsq :

Let me know if you have any questions. Reply when you can. I may be offline or with a customer, please be patient, I will respond as soon as possible. If I can provide you with any additional service, please don't hesitate to ask. A rating of “OK SERVICE” and above will allow me to get credit for my work. Bonus is not mandatory but much appreciated. Thank You.

Customer:

Hi,

Customer:

Hi sorry I had to do some hair.

Customer:

IM still wondering how it works If we end up accepting payments from them. There must be a special contract for this as well. Thanks

BartEsq :

Its ok.

BartEsq :

Yes...its alled a buy-sell agreement. Usually they are in place when you start the partnership.

BartEsq :

Under the circumstances, it can be as complicated or simple as you want. If you trust your partner, you can technically do it with a hand shake or something as simple as writting a contract on a napkin. Point is, it is probably best to put something in writing talking about how much you will get paid for what.

Customer:

oh no, we definitely want it in writing as this is not ending warm and fuzzy and I want it done legally so we can do something if they stop paying! So...would this be the same as the "buy sell agreement"? We are splitting because I dont want to be partners with her anymore! sort of like a divorce:) That being said would still like it simple, so if we could do everything on one contract that would be great.

Customer:

Is this possible? buy sell/ disolve all in one?

BartEsq :

You can do it all. You either sell your interest or disolve the business. You can sell your interest, let the new owner convert the sole proprietorship to a new business entity. Or you can both dissolve now. And let her start a new business. Doent make sense to buy sell and dissolve all together.

BartEsq :

If the business is going to end, think dissolution. If its going to keep going, think conversion. And its best jsut to sell your interest and let the new owner reorganize. In which case I would recommend an LLC. You can direct the new owner to me by putting To Bart at the begining of thier questions.

BartEsq, Researcher
Category: Business Law
Satisfied Customers: 1506
Experience: Juris Doctor
BartEsq and 8 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Hi Bart,


I have in reference to my partner buying me out and if we are going to carry the balance


how does the interest rate work? How do you know how much interst to charge.


Is this considered a business loan. I am not a bank yet they want to take 5 years to


pay us for our half.


any suggestions.


thanks


shelley upton

Expert:  BartEsq replied 1 year ago.

Basically, you would be giving them a loan. You can negotiate the interest rate. Personally, I think you would be better off getting a bank involved and having them get a secured loan. If you agree to a sale with time tabled payout, the company could file bankruptcy and you lose out. Even a loan not personally guaranteed by the new owner would put you at risk of not getting paid in the event of dissolution.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1162
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1142
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    393
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    301
    13 years practicing attorney, MBA
 
 
 

Related Business Law Questions