Also available in PDF | MS Word

Whatever the form of your business, you will need for follow an organized plan for settling and distributing your assets. Your plan may have to follow guidelines set forth in your state statutes. You may also have to report the settlement and distribution to the IRS and state and local tax authorities. The following checklists are adopted from various sources and are provided for information only. You will have to check state statutes to determine the appropriate procedure for your business.

Partnerships

• All contracts and obligations are completed.

• All the property and assets are appraised at their book value as shown in the balance sheet at the end of the last month before dissolution.

• Creditors are paid from partnership assets; this includes partners who are creditors.

• If partnership assets are insufficient, liabilities are paid by the partners in proportion to their shares in the partnership.

• If any of the partners are insolvent, or otherwise unable or unwilling to pay, the liabilities are paid by the remaining partners in proportion to their shares in the partnership.

• The costs of winding up the partnership are paid.

• A contingency fund is set aside for the purpose of paying any taxes or liabilities that arise following dissolution.

• The remaining corporate assets are distributed:
  • To the limited partners shares of profits and interest on capital pursuant to any agreement (usually in proportion to original investment).
  • To the limited partners return of capital investment.
  • To the general partners shares of profits and interest on capital pursuant to agreement (usually in proportion to original investment).
  • To the general partners return of capital investment.
  
  
• Each partner executes whatever documents are necessary to transfer property apportioned to other partners.