When a California business partnership no longer suits your needs, you need to take certain steps if you wish to put an official end to the partnership. The exact steps you must take might depend on the terms of your partnership agreement and whether a death, dispute or something different caused you or someone else to want to end the partnership.
However, there are certain parties you must inform when you decide to end your partnership. Per the State of California Franchise Tax Board, when you end your partnership, you need to notify both the Franchise Tax Board and the office of the California Secretary of State.
Notifying the Franchise Tax Board
When you end your California business partnership, you need to file any outstanding tax returns your business may have, including any fees or assessed interest. You also need to file a tax return for the current year. Finally, you need to formally cease all business operations in California when the tax year comes to an end.
Notifying the Secretary of State
Dissolving your California business partnership also involves filing a dissolution form with the California Secretary of State. You need to do so within 12 months of the date you filed your final business tax return. If your business underwent forfeiture, you need to take certain steps to revive it before you may formally dissolve it.
Notifying other relevant parties
In addition to letting the FTB and SOS know that you plan to dissolve your business partnership, you also have to notify vendors, creditors, suppliers, customers and your own workers about the change. You must also close all business-related financial accounts and cancel any current business licenses or permits you may have.
Keep in mind that if your California partnership conducted operations in other states, you may need to make additional moves to terminate the partnership.
