In many ways, the steps you take to dissolve a business partnership in California are just as important as those that you used to form it. Proceeding with care is an excellent way to preserve personal and professional relationships and avoid opportunities for disagreements or even litigation. If you consider these factors during the process, the dissolution should be as amicable and satisfactory as possible.

Perhaps the most important factor to consider is the agreement that originally formed the partnership. Typically, a California partnership agreement contains the terms, responsibilities and rights of all partners in the event that their venture must one day be dissolved. State law does not require a written partnership agreement. If one is not in place, it is wise for each partner to seek their own legal counsel before proceeding with the dissolution. Otherwise, it is important for the partners to abide by the terms of the original agreement.

Another vital factor to consider is any debts held by the partnership. The partnership agreement may spell out how debts will be divided in the event of a dissolution. If not, then it is essential for the partners to discuss who will be responsible for any debts. Just as important is deciding how the partnership’s assets will be distributed. Partners who are still amicable should have little difficulty discussing these matters. Nonetheless, it may make sense to involve California business attorneys in the negotiations.

It is similarly necessary for the partners to vote or otherwise undertake an action that formally ends their partnership. When a written partnership agreement exists, the terms of the voting are usually spelled out in it. It’s common for the agreement to require that the dissolution vote be unanimous or have at least a majority of the partners voting in favor of the dissolution. Sometimes, not all of the partners want to end the agreement. The partnership agreement may provide for this eventuality by making it possible for the partners who want to continue to buy out the partners who want to leave. If the partners cannot reach an agreement on this issue, litigation may be necessary.

Dissolving a California business partnership can be a complex process even when a written partnership agreement exists. You can trust the Orange County business lawyers at Fitzgerald Yap Kreditor to provide sensible legal advice in a difficult time.  Call Calvin Yap at (949) 788-8900 or send an email to for a consultation.