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Notice of Withdrawal from Partnership

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The withdrawing or retiring partner serves notice on the other partners.

Frequently Asked Questions
What difference does it make who serves the notice?When a partner wants to leave a partnership, that partner gives notice to the other partners. This is called a voluntary withdrawal. An example would be selling one's partnership interest to another party in order to retire.

On the other hand, if for any reason the other partners need to remove a particular partner from the partnership, they can do so without that partner's consent as long as that is provided for in the partnership agreement. This is called expulsion and involves the remaining partners giving notice to the expelled partner or that partner's representatives. Examples of expulsion are: death of partner, incapacity of partner, disability of partner, incompetence of partner, breach of fiduciary duty by partner, criminal conviction of partner, operation of law against partner, and legal judgment against partner.


Your Notice of Withdrawal from Partnership

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NOTICE OF WITHDRAWAL FROM PARTNERSHIP

To: Partners of ______________________________ (the "Remaining Partners")

From: ______________________________

______________________________ (the "Withdrawing Partner") of ______________________________ is a partner in the partnership of ______________________________ (the "Partnership") established on the 4th day of July, 2022 for the purpose of __________ and formed in accordance with a partnership deed (the "Partnership Deed").

The Withdrawing Partner desires to voluntarily withdraw from the Partnership. The date of the withdrawal will be the _____ day of _____________, 20____.

With this document, the Withdrawing Partner gives ______________________________________________ notice of withdrawal in writing by registered post to the Remaining Partners at each Remaining Partner's last known address.

The Partnership Deed is governed by the laws of  and provides that the exclusive jurisdiction for the enforcement of this matter is with the courts of .

The Remaining Partners have ______________________________________________, or as otherwise provided in the Partnership Deed, to provide a buyout offer to the Withdrawing Partner. In the event a buyout offer is not provided within that period, then action must be taken to dissolve and liquidate the Partnership.



_________________________
______________________________



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Date

What is a Notice of Withdrawal from Partnership?

A Notice of Withdrawal From Partnership is a formal notice that one of the partners in a partnership is leaving. The notice lets all the partners know which partner is exiting the partnership and the date it takes effect.

There are two types of partnership withdrawals:

A voluntary withdrawal is when a partner decides to leave a partnership on their own free will. Retirement or career change are the usual reasons for this type of withdrawal.

Involuntary withdrawal occurs when the partners remove a member of the partnership. In this case, the remaining partners jointly service notice. Some common reasons for this type of withdrawal can include death, incapacity, incompetence, or a partner’s criminal conviction.

A Notice of Withdrawal from Partnership is also called a:

  • Partnership Withdrawal
  • Partnership Withdrawal Letter
  • Partnership Withdrawal Agreement
  • Partnership Dissolution Agreement

What happens when a partner exits a partnership?

In most cases, the details in the Partnership Agreement will determine what happens when a partner exits a partnership. The agreement will likely specify how much notice the partnership needs to receive and whether the partnership will dissolve. If there is only one partner remaining, the partnership must dissolve.

The Partnership Agreement will also note the partner’s capital contributions, which will indicate their financial stake in the partnership and how much they are entitled to when they leave.

If the Partnership Agreement doesn’t specify what happens when a partner leaves, the remaining partners are bound by the The Indian Partnership Act, 1932 to dissolve the partnership. When a partnership dissolves, its affairs must be wound up, assets liquidated, debts paid, and the partners equally divide the surplus.

The Indian Partnership Act, 1932 contains clauses which provide a default framework which applies to any partnership in the absence of a partnership agreement. Some of these provisions will likely not suit your partnership. This is why it’s very important for any partnership to draw up a Partnership Agreement at the outset.

How do I create a Notice of Withdrawal From Partnership?

LawDepot's Notice of Withdrawal from Partnership template allows you to easily create a document that’s customised for your needs.

1. Specify who is leaving the partnership

Begin your Notice of Withdrawal From Partnership by stating if the withdrawing partner or the remaining partners are drafting the document.

If it is an involuntary withdrawal, the notice needs to state the reason for removing the partner. Note that to remove a partner, the Partnership Agreement must include the power to do so. You can choose from the following reasons:

  • The partner has died
  • Incapacity of the partner
  • Disability of a partner
  • Incompetence
  • Breach of fiduciary duty
  • Criminal conviction
  • Operation of law
  • Legal judgment

Note that in the case of death or incapacity of the partner, the notice will be served on the legal representatives of the deceased or incapacitated partner.

2. Provide your location

Note which law applies to your partnership. Check the governing law clause in your partnership agreement. If there is no partnership agreement, select the jurisdiction where your partnership is based. Your Notice of Withdrawal from Partnership will state the law applicable to your partnership.

LawDepot has templates for the following Indian states and union territories:

  • Andaman and Nicobar Islands(AN)
  • Andhra Pradesh (AP)
  • Arunachal Pradesh (AR)
  • Assam (AS)
  • Bihar (BR)
  • Chandigarh (CH)
  • Chhattisgarh (CG)
  • Dadra and Nagar Haveli (DN) and Daman and Diu (DD)
  • Goa (GA)
  • Gujarat (GJ)
  • Haryana (HR)
  • Himachal Pradesh (HP)
  • Jammu and Kashmir (JK)
  • Jharkhand (JH)
  • Karnataka (KA)
  • Kerala (KL)
  • Ladakh (LA)
  • Lakshadweep (LD)
  • Madhya Pradesh (MP)
  • Maharashtra (MH)
  • Manipur (MN)
  • Meghalaya (ML)
  • Mizoram (MZ)
  • Nagaland (NL)
  • National Capital Territory of Delhi (DL)
  • Odisha(OR)
  • Puducherry (PY)
  • Punjab (PB)
  • Rajasthan (RJ)
  • Sikkim (SK)
  • Tamil Nadu (TN)
  • Telangana (TS)
  • Tripura (TR)
  • Uttar Pradesh (UP)
  • Uttarakhand (UK)
  • West Bengal (WB)

3. Provide the partnership’s and the withdrawing partner’s details

Provide basic partnership details in your withdrawal notice. This includes the partnership’s name and purpose, and the date it was established.

You’ll also need to state the withdrawing partner’s details. Be sure to specify their name, address, and whether they're an individual or a business entity.

4. Include details about the withdrawal

Indicate when the partner is withdrawing from the partnership in your notice. You can do this by providing an exact date or the amount of notice the partnership is receiving (e.g., two weeks, 90 days, six months, etc.).

Also, be sure to mention if the partnership has received a third party offer to purchase the withdrawing partner’s interest in the partnership. If an offer has been made, name the third party and state the offer amount.

If the Partnership Agreement requires the partners to buyout the withdrawing partner’s interest, specify when they will make the buyout offer.

5. Include any additional clauses

Include any additional clauses in your notice that are relevant to the partner’s withdrawal. Review your Partnership Agreement if you’re unsure whether there are any clauses that need addressing.

6. Specify the signing details

Once your Notice of Withdrawal From Partnership is ready, you can sign and date the document.

Withdrawal notices don’t normally need witnesses in order to become official documents. However, if you do include a witness, they should be an adult who is capable of understanding the witnessing process and who has no conflicts of interest.

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