A partnership can help a business succeed because each partner contributes unique talent.
The state of Florida has elaborate laws that guide the operation of business partnerships. The laws cover the formation requirements and the scope of operations for a business partnership. There are also guidelines on dissolution of a partnership. According to the laws, all partners in a business must agree before one partner moves to dissolve a partnership. All matters regarding dissolution of partnerships in the state are handled by the Florida Revised Uniform Partnership Act (FRUPA).
Partnership Agreement
Partners are allowed to decide the terms under which the partnership will operate. Some of the issues they can specify include the circumstances under which the partnership can be dissolved. If the partners do not include these details in the partnership agreement, FRUPA outlines the procedures to be followed to dissolve the partnership.
Reactive Dissolution
The Florida Revised Uniform Partnership Act covers reactive dissolution and winding up of a partnership business. A reactive dissolution occurs when one of the partners dies, is declared bankrupt or becomes incompetent. If this happens, the partnership is dissolved and the business is wound up. However, the partnership can be maintained if a majority of the remaining partners agree to continue with it within 90 days.
Partnership at Will
The Florida Revised Uniform Partnership Act (FRUPA) stipulates that a partnership must be dissolved if any partner decides to withdraw. Even with this act in place, however, a partnership can still survive if one partner withdraws. This is because FRUPA allows partners to draft a partnership agreement that states clearly that a partner who is leaving cannot force the business to be wound up but must be bought out by the remaining partners.
Winding Up
Dissolution marks the beginning of the process of winding up a business but it can be reversed. The partners can change their mind about terminating the partnership and decide to carry on with the business partnership. For the partnership to continue in this case, the consent of all partners, including the dissociating partner is, is required.
