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Dissolving a Utah Small Business Partnership

by Norris Law Group on June 19, 2014

Dissolving a Utah Small Business PartnershipIf you have entered into a Utah small business partnership and you and your partner(s) have decided to cease doing business, you can choose to dissolve the partnership at any time. But you should know some rules that apply to dissolving partnerships at the Utah state level as well as at the national level.

According to the Utah State Tax Commission, domestic companies operating in Utah must dissolve their partnership(s), while foreign companies doing business in Utah must withdraw. Once this is done, the company will no longer be liable for Utah state taxes from the date of the dissolution or withdrawal. But the company will still have to pay any taxes it may have incurred in a given tax year prior to the cessation of operations.

At the national level, the Small Business Administration (SBA) offers some advice as to what steps company owners should take when they are preparing to close a business:

  1. “Have you or your partners completed all agreed duties?”
  2. “What is the business worth?” A third party, such as an attorney experienced in the areas of asset protection and contracts, a financial advisor and/or a tax specialist can help you determine this. After the partnership has been dissolved, each partner should expect to take on any liabilities and receive assets in proportion to his or her ownership stake in the business.
  3. Review all leases, contracts, and loan agreements to see how the dissolution will affect [you].”  Are there any existing contracts which will continue to tie you to the business? Do you own outstanding loans or other debts? Are there liens on any of the business’ real property? You should ask yourself questions such as these. Again, a conversation with a skilled attorney can help make the dissolution of your Utah partnership goes much more smoothly.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County and throughout Utah in the areas of contracts and asset protection. Contact them today at 801-932-1238 or online for a free consultation.

 

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