by Noel Bagwell
for Executive Legal Professionals, PLLC

July 22, 2015

Breaking Up Is Hard To Do

Breaking up is the hardest thing we do. It’s the most important thing we do, in a way. You’ve got to embrace rejection, or you’ll maintain a very limited life. It’ll be very nice and neat – and very, very small. — Laurie Helgoe, American Psychologist

As Doo-wop star Neil Sedaka famously sang, in 1962, breaking up is hard to do. Still, breaking up is important–even necessary–for our growth. This is true in business as well as in our personal relationships. Still, that doesn’t make it easy. In the rest of this article, you’ll find helpful information that should make breaking up a business partnership just a little bit easier. Maybe you should also listen to the song. It might make you feel better.

The most common laws that govern Partnerships are the Uniform Partnership Act (UPA) and the Revised Uniform Partnership Act (RUPA, not to be confused with Roomba), as adopted by various jurisdictions. The state in which I am licensed to practice law, Tennessee, has adopted the RUPA. To better understand the basic concepts of “dissolution,” “wind-up,” and “liquidation” with which this article is concerned, it’s useful to examine the definitions of those terms under the UPA and RUPA.

Containing the Fallout

Fallout ShelterUnder RUPA, the definition of “dissolution,” with respect to Partnerships, differs a great deal from the lay understanding of that term. “‘