Law Firm Dissolution
Partnerships and law firms are formed by lawyers who have common professional interests with intentions to practice together for the foreseeable future. Sometimes, these plans do not work out, and the partners may head toward dissolving the firm.
Partners leaving, partners disagreeing, financial instability, and lack of planning are some warning signs that a law firm is in danger of dissolving.
If you are in the position of having to dissolve your law firm, have an honest conversation with your business partner if you have one. Explain how you have different expectations about how the firm is run. Discuss whether you both wish to practice law and who, if anyone, will take any clients or the business’ name.
Law Firm or Law Partnership Dissolution Checklist:
- Appoint an attorney to oversee the dissolution and will liaison with any accountants.
- Follow dissolution procedures stated in your partnership agreement.
- Cancel any advertising or marketing initiatives.
- Collect money owed to the firm.
- Cancel firm credits cards and close bank accounts.
- Notify your landlord and employees.
- Notify Insurance carriers.
- Settle creditor claims.
- Cancel business licenses and permits.
- File dissolution papers with the state.
- Prepare a mailing to inform clients.
The Internal Revenue Service Advises Firms Dissolving to:
- File an annual return for the year you dissolve your firm. Partnerships must indicate it is their final tax return.
- File employment tax returns.
- Make final federal tax deposits.
- Issue final withholding information and wages to employees.
- Report capital gains, losses, partner’s shares, W-2, and 1099 information.
- Report corporate dissolution.
- It is essential to ensure all tax matters are handled appropriately and with the help of an accountant and.
When attorneys are closing a law firm, they must be mindful of all obligations, both fiduciary and as it pertains to clients. The attorney must communicate with clients, deal with client trust accounts appropriately, and remain diligent as the deadline to close the firm nears.
- Giving reasonable notice to the client that the attorney is terminating the representation.
- Allow the client time to retain other counsel.
- Return files and property to the client.
- Refund any advance payment of a fee or expense that has not been earned or incurred
- Keep complete records of client account funds and property for five years after ending representation.
Paul J. Burkhart
Paul J. Burkhart can help you when you are dissolving your law firm or partnership. Paul J. Burkhart is an experienced attorney and can offer legal advice and ensure that all agreements are legal and binding.
Our team assists both individuals, and business clients with all their legal needs, including business and Corporate Transactions, Business/Commercial and Civil Litigation, Real Estate, Intellectual Property, Family Law, and Estate Planning matters. We are a full-service private law firm ready to assist you with any request, large or small. Call 561-880-0155 or visit our website.
Law Offices of Paul J Burkhart, PL
800 Village Square Crossing
Palm Beach Gardens, FL 33410
Phone: (561) 880-0155
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