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How can we convert our Partnership into a Sole Proprietorship.
Anonymous3 views2 answers
In the State of California. We never filed a partnership statement, we just signed a simple agreement in 1999 that we were doing business as a partnership according to the Cal Code/Partnership Act. We have a DBA which my soon to be ex-partner would like to keep. We also have a tax ID number. No debts, all bills paid. Actually there has been no business activity for quite a while because I moved out of the country. We have not filed a partnership tax return for 2010 because there was no business activity (no income / no expenses). We had an event production company and when I left we just stopped producing them.
Sell your partnership interest to your partner for $10.00 via a simple agreement. Tax return still has to be filed or you could be liable. Have partner indemnify you for tax liability or both file before you sell your interest.
In addition to my colleague's advice, you'd need to change the DBA and register your own, or talk your STBX partner from keeping the one you've been using and having them assign that to you as well. Why do they want to keep it if they want out of the partnership?
If the company has been using the DBA as a trademark (whether registered or "common law"), you need to make sure that that's assigned to you as well, in addition to any other partnership assets such as customer lists, trade secrets, "know how," etc.
See a business lawyer for help just to make sure you're covering everything.
