How to Terminate a Partnership Agreement

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Sometimes business partnerships don't work.
Sometimes business partnerships don't work. (Image: business men around the world image by Leticia Wilson from Fotolia.com)

Not all business partnerships work out the way the principals thought they would when the partnership was first formed. As such, there needs to be a way to dissolve a formal partnership so that the partners can separate and conduct business on their own and how they see fit. Partnerships are automatically dissolved if one partner passes away or has to file for bankruptcy. Otherwise, partnerships need to follow a process to end their arrangement.

Things You'll Need

  • Client list
  • Creditor list
  • Dissolution and liquidation paperwork
  • Landlord information
  • Utility account information

Contact federal, state and municipal tax offices and notify them about the partnership dissolving.

Complete and file with the state office that granted the partnership the dissolution and liquidation forms. Send the originals to the state office by either registered mail or using the receipt-requested feature to ensure that you have a date when the state office received the paperwork. Keep copies of the forms for you and your former partner(s).

Contact clients, customers and vendors with whom the business had dealings and notify them of the decision to dissolve the partnership.

Contact creditors, debtors and any banks or other financial institutions and notify them of the decision.

Tell landlord and utility companies, if the partnership occupied a building or office, that the partners will be vacating the property. This applies if the partnership was not tied to a lease.

Tips & Warnings

  • While it may not be necessary to use the services of a lawyer, it may be wise to seek out professional legal and accounting advice to wind up affairs as efficiently as possible.

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