The creation and dissolution of a business can be compared to a marital union. Much like a marriage takes effort and planning, especially when it comes to important details relating to finances, a business needs to be formed with a business plan and financial planning in mind. Similar to the major decisions that are made during a divorce, careful considerations need to be made when dissolving a business. And similar to a divorce, the dissolution of a business can be emotionally difficult and ruinous to one’s finances if it is not handled carefully.
While a business may end simply because the owner does not want to continue operations, things are typically more complex than that. This is especially true if there are business partners involved.
Business dissolution commonly includes situations such as low cash flow, bad management, too much competition, an unfavorable economy, product liability issues, business planning that failed to address future dealings, disagreements between partners or significant life events, such as death, illness or divorce.
Protecting your personal finances
Closing a business does not necessarily mean financial losses for the partners. Even if there are financial hardships leading to the decision to close a business, the dissolution of the business does not necessarily require enduring additional financial strain.
Whether you are contemplating business dissolution, have begun the course to close the business or are facing difficulties completing the process, it is important to fully understand your rights and options. By taking proper legal action, you not only protect the dissolution process but your personal legal and financial rights as well.