Liquidating distribution partnership
If there is not an agreement in place, distribute the income evenly among the partners. The state tax return will differ depending on which state your business is located in.
File Form 1065 with the IRS to report partnership income, and distribute Schedule K-1 to each partner, listing their share of the income.
It will be the guiding document throughout the liquidation process. If your partnership was doing business under a fictitious business name, file to cancel the business name.
Unlike limited partnerships or general partnerships where one or more partners are personally liable for the debts of the business, an LLP limits liability for all partners.
Issue form W-2 to each employee to report wages withheld. Notify all creditors and lenders of your intent to dissolve the partnership.
If the partnership does not have enough money to pay the debts, first sell the partnership's assets to generate income.
Sell any remaining partnership assets and distribute income to partners.
How the income is divided will be determined by the partnership agreement.