How to Dissolve Family Partnerships in Texas

Dissolution of a Texas family limited partnership agreement is governed by both the partnership agreement and Texas statutory law.

Texas recognizes a limited partnership as a valid form of a business organization. A family limited partnership, or FLP, is not a legally-recognized entity in Texas, but the state refers to limited partnerships involving relatives as FLPs. To file for the dissolution of an FLP in Texas, there must be an event that triggers the dissolution. Examples of such events include the written consent of the FLP’s partners to voluntarily dissolve the partnership, an entry of decree of dissolution by judicial order, the expiration of the FLP’s finite period of duration as set forth in its partnership agreement or the occurrence of an event specified by FLP’s partnership agreement that requires dissolution.

Things You'll Need

• Family limited partnership agreement
• Certificate of Termination of Domestic Entity (Form 651)
• Signature of authorized individual
• Certificate of account status (Comptroller Form 05-305)

Instructions

Filing for Dissolution

1. Download the “Certificate of Termination of Domestic Entity,” Form 651, from the Texas Secretary of State website.

2. Fill out the required sections of the form by typing your text into the highlighted areas.

3. Ensure that an authorized individual, in accordance with the form’s instructions and Texas statutory requirements, signs and dates the form.

4. Print two copies of the completed form.

5. Request a certificate of account status, or Comptroller Form 05-305, from the Texas Comptroller of Public Accounts. Pursuant to the Texas statutes, this certificate of account status must show that the FLP has paid all its taxes under Tax Code Title 2 and that the FLP is in good standing for the dissolution process. Do not obtain your certificate of account status from the Texas Comptroller's website, since a certificate obtained in this manner will not be accepted as part of your Form 651.

6. Mail or fax your completed Form 651 and a duplicate along with your filing fee and certificate of account status to the Texas Secretary of State in Austin, Texas. The mailing address and fax number are located on the top left of Form 651. As of September 2011, the filing fee is $40 and is payable by personal check, money order, LegalEase debit card and most major credit cards. If you fax Form 651 to the Secretary of State, then you must pay your filing fee by credit card and include your credit card information in your fax.

Tips & Warnings

• As of September 2011, Form 651 can be filed online through the Texas SOSDirect system on the Texas Secretary of State website. (See References 3) SOSDirect charges users a $5 convenience fee. (See References 3)

• Dissolution of a FLP can cause an array of financial, tax, and estate planning consequences. As such, it is prudent to consult with an attorney who specializes in business organizations, tax planning, and trusts and estates law prior to filing for dissolution of the partnership.

References

• The Texas Probate Web Site: Frequently Asked Questions about Family Limited Partnerships
• Texas Secretary of State; Certificate of Termination of a Domestic Entity; May 2011

Resources

• Accion Texas-Louisiana Business Center; Texas Business Entity Comparison Chart; 2009
• Texas Practice Series; Causes of Dissolution; Robert W. Hamilton, et al.; 2009