How to approach partnership dissolution
Ending a partnership can be a complicated process, so it is vital that you obtain the correct advice before making any hasty decisions.
Under a general partnership, a partner cannot retire unless there is agreement to the contrary. One way to exit a partnership in the absence of an agreement is to dissolve the partnership, and there are rules in place for this process. One partner can dissolve the partnership by giving notice to the other partners. The remaining partners can then reform the partnership if they wish to do so, but there are negative tax implications in doing this.
In exiting a partnership, it is important that an agreement is reached as to limiting the partner’s liability to the time that he or she was in partnership. It is also important that clients are notified of a partner’s exit and notices are placed in local papers and in the London Gazette.
It should also be noted that, unless there is a pre-existing agreement to the contrary, a partnership is automatically ended in the event of the death or bankruptcy of one of the partners. Dissolution of a partnership also occurs if the purpose of the partnership is found to be illegal.
Get advice from Ralli Partnership Law on ending a partnership
If you have a partnership agreement in place, you need to look at the terms of this to confirm how to exit the partnership. Ralli Partnership Law has years of experience in these matters, and can help take care of this for you. Contact us today for a consultation.