Dissolution

Dissolving a partnership can have major consequences – we can provide the advice to guide you.  

The issues you need to consider depend on what kind of partnership you are in. The dissolution of a general partnership sees the relationship between partners comes to an end. It can happen very easily, sometimes by accident, particularly where there is no partnership agreement in place.

There are two types of dissolution here. There’s a ‘technical’ dissolution, where there is a change in partners but the business carries on. Usually, third parties will be unaware this has happened.

In contrast, a ‘general’ dissolution is the process which leads to a winding up of the business and assets of the partnership. Once that process is complete, the partnership’s liabilities will be paid off (subject to enough money being available to do so), with any remaining assets being divided between the partners. The partnership will then, as a legal entity, no longer exist.

A general dissolution can happen in a number of different circumstances, including:

• Unanimous agreement of the partners.
• In accordance with the terms of the partnership agreement (if there is one).
• The expiry of a fixed term or purpose for which the partnership was established, or by a partner giving notice.
• In circumstances of illegality or fraud of a partner.
• By Order of the Court on various grounds, including where a dissolution would be ‘just and equitable’.

The rules relating to the dissolution of Limited Partnerships are similar to those for general partnerships with certain important exceptions. However, the position for Limited Liability Partnerships (LLPs) is completely different. An LLP has a separate legal identity (like a company) and therefore a formal process generally has to be undertaken in order for it to be dissolved.

Whatever your circumstances, the dissolution of a partnership can be a complex process and you will need expert help to navigate it. We are the experts and can provide the timely, effective advice you require to ensure the dissolution is completed as quickly and efficiently as possible.