Legal Question in Business Law in Arkansas

Convert Partnership to Sole Proprietor

My partner and I started a business, but didn't do much with it for a while. Recently, we recieved a government SBIR grant. It covers enough for my salary, but that's about it. My partner wants to leave and do other things, and isn't worried about money or anything. She just wants out. So, I need to switch to a sole proprietorship. Problem is, I don't know that I can change tax ids or business name while in the middle of a government contract. I'm having trouble finding anything that details with this specifically. Anything I need to be aware of?


Asked on 7/12/07, 7:56 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

Re: Convert Partnership to Sole Proprietor

You should be able to resolve this by having a written agreement with the partner, taking responsibility for all debt and income yourself. Then you would need to make no formal changes to the business -- that is unless the govt grant was based upon the partner's participation and obligation on loans and repayments, etc. It can probably be worked out. Feel free to contact me if you want help doing so.

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Answered on 7/12/07, 8:04 pm
Johm Smith tom's

Re: Convert Partnership to Sole Proprietor

This is not a complicated matter, but you should have an attorney assist you whenever you deal with this much potential liability; it will be well worth it.

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Answered on 7/12/07, 11:40 pm


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