Want out of General Partnership. Whats involved?

[amn70]

What is the name of your state (only U.S. law)? NY

My friend and I started a small vending machine business at the beginning of last year. We registered the business as a general partnership and opened a business checking account. We have filed the income tax for last year as a GP as well. Neither of us really is putting much effort into the business and I have decided I want out of it. He wants to continue to do it which is fine by me but I want out. We don't have any formal contract between us. Just a handshake. We both have very little invested into the business and owe nothing to the business at this point. Whats involved with me removing myself as his partner? Oh and he has no issue with me bailing. He is doesn't care. I just want to know what I need to do officially.

Thanks in advance,
Adam

 

[tranquility]

You wind up the partnership. Close it completely. He can restart it as a sole proprietership.

 

[FordRanger8899]

Ford Ranger Forum

File an annual registration, check payment status, search for corporations, verify certification, order corporate records, and order certificates of existence or certified documents.

 

[amn70]

You wind up the partnership. Close it completely. He can restart it as a sole proprietership.

I guess I shouldn't have said he doesn't care. He isn't happy about it but there isn't any risk of him complicating process but I want to make it as easy for him as possible. If there an easier way other then closing it and having him reopen as a SP. Something where the paperwork on his end is minimal. I would prefer simply being able to file paperwork on my own just to get me out of it with maybe nothing more needing signature from him.

 

[tranquility]

If you withdraw, it's no longer a partnership. Unitl you withdraw, you will have joint and several liability for all acts of the parnership. Even when you withdraw, you will have joint and several liablity to all those who don't have actual knowledge of the withdrawal and you may have contibution from your partner.

There is nothing a signature is going to do to your real risk. The entity is a partnership. If there are no partners, what would you call it?

 

[amn70]

If you withdraw, it's no longer a partnership. Unitl you withdraw, you will have joint and several liability for all acts of the parnership. Even when you withdraw, you will have joint and several liablity to all those who don't have actual knowledge of the withdrawal and you may have contibution from your partner.

There is nothing a signature is going to do to your real risk. The entity is a partnership. If there are no partners, what would you call it?

So the easiest way is going to be to agree to mutually dissolve the partnership altogether, close the bank account and then let my partner reregister the business as an SP. Do you have any idea if there are any forms for New York that we have to fill out to dissolve it. I found a form on the NYS Division of Corporations website to dissolve corporations but found nothing about general partnerships anywhere else on the NY site. And is there a special form for the IRS that we need to also file or just a final return?

 

[tranquility]

No. I suggest consutation with a CPA or attorney.