Free Partnership Agreement

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Free Free Partnership Agreement

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Partnership Agreement

Partnership Details

Partnership Details

What is the name of the partnership?What name should I use?It is recommended you carry out a business name search when choosing a name for your partnership to avoid confusion with any similarly named business in your industry.
e.g. Smith Jones & Associates

What is the address of the partnership?How should I write the partnership's address?Write the full address of the partnership, which is usually the location of the main office or headquarters. If your partnership does not have a business premises, use the home address of one of the partners instead.
e.g. Street, Suburb/Locality, City/Town, Postcode

Your Partnership Agreement

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THIS PARTNERSHIP AGREEMENT (the "Agreement") made and entered into this ________ day of ________________, ________ (the "Execution Date"),


____________________________ of ___________________________________________________________________, and
____________________________ of ___________________________________________________________________
(individually the "Partner" and collectively the "Partners").


  1. The Partners wish to associate themselves as partners in business.
  2. This Agreement sets out the terms and conditions that govern the Partners within the Partnership.

IN CONSIDERATION OF and as a condition of the Partners entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:

  1. Formation
  2. By this Agreement the Partners enter into a general partnership (the "Partnership") in accordance with the laws of New Zealand. The rights and obligations of the Partners will be as provided under the common law and as stated in the Partnership Act 1908 and any other applicable legislation (the "Act") except as otherwise provided in this Agreement.
  3. Name
  4. The firm name of the Partnership will be: _____________________
  5. Purpose
  6. The purpose of the Partnership will be: ___________________________________
  7. Term
  8. The Partnership will begin on 15 June 2024 and will continue until terminated as provided in this Agreement.
  9. Place of Business
  10. The principal office of the business of the Partnership will be located at ____________________________________________________________ or such other place as the Partners may from time to time designate.
  11. Initial Capital Contributions
  12. Each of the Partners has contributed or will contribute to the capital of the Partnership, in cash or property or in non-monetary contributions in agreed upon value, as follows (the “Initial Capital Contribution"):


    Contribution Description

    Agreed Value





  13. All Partners must contribute their respective Initial Capital Contributions fully by June 15, 2024.
  14. Additional Capital
  15. The capital contribution of a Partner comprises that Partner’s Initial Capital Contribution and any additional capital contribution (the “Additional Capital Contribution”) made by that Partner to the Partnership at a later date (together the “Capital Contribution”). No Partner will be required to make an Additional Capital Contribution. When the Partnership requires additional capital, each Partner will have the opportunity to make an Additional Capital Contribution in proportion to that Partner’s share of the total Capital Contributions to the Partnership. If an individual Partner is unwilling or unable to meet the additional contribution requirement within a reasonable period, as required by Partnership business obligations, then by a unanimous vote of the Partners the remaining Partner may contribute in proportion to their existing Capital Contributions to resolve the amount in default.
  16. Any advance of money to the Partnership by any Partner in excess of the amounts provided for in this Agreement or subsequently agreed to as Additional Capital Contribution will be deemed a debt owed by the Partnership and not an increase in Capital Contribution of the Partner. This liability will be repaid with interest at rates and times to be determined by a majority of the Partners within the limits of what is required or permitted in the Act. This liability will not entitle the lending Partner to any increased share of the Partnership's profits nor to a greater voting power. Such debts may have preference or priority over any other payments to Partners as may be determined by a majority of the Partners.
  17. Withdrawal of Capital
  18. No Partner will withdraw any portion of their Capital Contribution without the express written consent of the remaining Partners.
  19. Capital Accounts
  20. An individual capital account (the "Capital Accounts") will be maintained for each Partner and their Initial Capital Contribution will be credited to this account. Any Additional Capital Contributions made by any Partner will be credited to that Partner's individual Capital Account.
  21. Interest on Capital
  22. No borrowing charge or loan interest will be due or payable to any Partner on their agreed Capital Contribution inclusive of any agreed Additional Capital Contributions.
  23. Financial Decisions
  24. Decisions regarding the distribution of profits, allocation of losses, and the requirement for Additional Capital Contributions as well as all other financial matters will be decided by a unanimous vote of the Partners.
  25. Profit and Loss
  26. Subject to any other provisions of this Agreement, the net profits and losses of the Partnership, for both accounting and tax purposes, will accrue to and be borne by the Partners in equal proportions, unless an Additional Capital Contribution has been made which changed the Initial Capital Contribution proportions of the Partners in which case each Partner will share in the net profit and losses of the Partnership in proportion to the new Capital Contributions (the "Profit and Loss Distribution").
  27. Books of Account
  28. Accurate and complete books of account of the transactions of the Partnership will be kept in accordance with generally accepted accounting principles and at all reasonable times will be available and open to inspection and examination by any Partner. The books and records of the Partnership will reflect all the Partnership’s transactions and will be appropriate and adequate for the business conducted by the Partnership.
  29. Annual Report
  30. As soon as practicable after the close of each financial year, the Partnership will furnish to each Partner an annual report showing a full and complete account of the condition of the Partnership. This report will consist of at least the following documents:
    1. a statement of all information as will be necessary for the preparation of each Partner's income or other tax returns;
    2. a copy of the Partnership's income tax returns for that financial year; and
    3. any additional information that the Partners may require.
  31. Banking and Partnership Funds
  32. The funds of the Partnership will be placed in such investments and banking accounts as will be designated by the Partners. Partnership funds will be held in the name of the Partnership and will not be commingled with those of any other person or entity.
  33. Financial Year
  34. The financial year will end on January 1 of each year.
  35. Audit
  36. Any of the Partners will have the right to request an audit of the Partnership books. The cost of the audit will be borne by the Partnership. The audit will be performed by an accounting firm acceptable to all the Partners. Not more than one (1) audit will be required by any or all of the Partners for any financial year.
  37. Management
  38. All the Partners will be consulted and the advice and opinions of the Partners will be obtained as much as is practicable. However, the Managing Partner will have management and control of the day-to-day business of the Partnership for the purposes stated in this Agreement. All matters outside the day-to-day business of the Partnership will be decided by a unanimous vote of the Partners.
  39. ___________________ will be the Managing Partner. The term "Managing Partner" will also include any party subsequently appointed to that role.
  40. In addition to day-to-day management tasks, the Managing Partner's duties will include keeping, or causing to be kept, full and accurate business records for the Partnership according to generally accepted accounting principles and overseeing the preparation of any reports considered reasonably necessary to keep the Partners informed of the business performance of the Partnership.
  41. A Managing Partner can voluntarily withdraw from the position of Managing Partner or can be replaced by a unanimous vote of the remaining Partners. In the event of a withdrawal or removal of the Managing Partner from the position of Managing Partner or from the Partnership, the remaining Partners will have equal rights in the management of the Partnership until they appoint a successor Managing Partner.
  42. The Managing Partner will not be liable to the remaining Partners for any action or failure to act resulting in loss or harm to the Partnership except in the case of gross negligence or wilful misconduct.
  43. Contract Binding Authority
  44. Each Partner will have authority to bind the Partnership in contract.
  45. Meetings
  46. Regular meetings of the Partners will be held as required.
  47. Any Partner can call a special meeting to resolve issues that require a vote, as indicated by this Agreement, by providing all Partners with reasonable notice. In the case of a special vote, the meeting will be restricted to the specific purpose for which the meeting was held.
  48. All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of all Partners.
  49. Admitting a New Partner
  50. No new Partners may be admitted into the Partnership.
  51. Voluntary Withdrawal of a Partner
  52. Any Partner will have the right to voluntarily withdraw from the Partnership at any time. Written notice of intention to withdraw must be served upon the remaining Partners at least three (3) months prior to the withdrawal date.
  53. The voluntary withdrawal of a Partner will result in the dissolution of the Partnership.
  54. A Dissociated Partner will only exercise the right to withdraw in good faith and will act to minimise any present or future harm done to the remaining Partners as a result of the withdrawal.
  55. Involuntary Withdrawal of a Partner
  56. Events resulting in the involuntary withdrawal of a Partner from the Partnership will include but not be limited to: death of a Partner; Partner mental incapacity; Partner disability preventing reasonable participation in the Partnership; Partner incompetence; breach of fiduciary duties by a Partner; criminal conviction of a Partner; Expulsion of a Partner; Operation of Law against a Partner; or any act or omission of a Partner that can reasonably be expected to bring the business or societal reputation of the Partnership into disrepute.
  57. The involuntary withdrawal of a Partner will result in the dissolution of the Partnership.
  58. A trustee in bankruptcy or similar third party who may acquire that Dissociated Partner's interest in the Partnership will only acquire that Partner's economic rights and interests and will not acquire any other rights of that Partner or be admitted as a Partner of the Partnership or have the right to exercise any management or voting interests.
  59. Dissociation of a Partner
  60. Where the dissociation of a Partner for any reason results in the dissolution of the Partnership then the Partnership will proceed in a reasonable and timely manner to dissolve the Partnership, with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in the Valuation of Interest section of this Agreement.
  61. The remaining Partners retain the right to seek damages from a Dissociated Partner where the dissociation resulted from a malicious or criminal act by the Dissociated Partner or where the Dissociated Partner had breached their fiduciary duty to the Partnership or was in breach of this Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to the Partnership or to the reputation of the Partnership.
  62. Dissolution
  63. Except as otherwise provided in this Agreement, the Partnership may be dissolved only with the unanimous consent of all Partners.
  64. Distribution of Property on Dissolution of Partnership
  65. In the event of the dissolution of the Partnership, each Partner will share equally in any remaining assets or liabilities of the Partnership, unless an Additional Capital Contribution has been made which changed the Initial Capital Contribution proportions of the Partners in which case the Partners will share the assets or liabilities in proportion to their respective Capital Contributions (the “Dissolution Distribution”).
  66. Upon Dissolution of the Partnership and liquidation of Partnership Property, and after payment of all selling costs and expenses, the liquidator will distribute the Partnership assets to the following groups according to the following order of priority:
    1. in satisfaction of liabilities to creditors except Partnership obligations to current Partners;
    2. in satisfaction of Partnership debt obligations to current Partners; and then
    3. to the Partners according to the Dissolution Distribution described above.
  67. The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Partnership assets after liabilities or any insufficiency in Partnership assets in resolving liabilities under this section will be shared by the Partners according to the Dissolution Distribution described above.
  68. Valuation of Interest
  69. In the absence of a written agreement setting a value, the value of the Partnership will be based on the fair market value appraisal of all Partnership assets (less liabilities) determined in accordance with generally accepted accounting principles. This appraisal will be conducted by an independent accounting firm agreed to by all Partners. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Partners. A withdrawing Partner's interest will be based on that Partner's proportion of the Dissolution Distribution described above, less any outstanding liabilities the withdrawing Partner may have to the Partnership. The intent of this section is to ensure the survival of the Partnership despite the withdrawal of any individual Partner.
  70. No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Partnership books immediately prior to valuation.
  71. Goodwill
  72. The goodwill of the Partnership business will be assessed at an amount to be determined by appraisal using generally accepted accounting principles.
  73. Title to Partnership Property
  74. Title to all Partnership Property will remain in the name of the Partnership. No Partner or group of Partners will have any ownership interest in such Partnership Property in whole or in part.
  75. Voting
  76. Any vote required by the Partnership will be assessed where each Partner receives one vote carrying equal weight, unless an Additional Capital Contribution has been made which changed the Initial Capital Contribution proportions of the Partners in which case each Partner will have voting strength in proportion to Capital Contributions.
  77. Force Majeure
  78. A Partner will be free of liability to the Partnership where the Partner is prevented from executing their obligations under this Agreement in whole or in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Partner has communicated the circumstance of said event to any and all other Partners and taken any and all appropriate action to mitigate said event.
  79. Duty of Loyalty
  80. No Partner will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Partnership or that would be in direct conflict of interest to the Partnership without the unanimous written consent of the remaining Partners. Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Partners. Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.
  81. Duty of Accountability for Private Profits
  82. Each Partner must account to the Partnership for any benefit derived by that Partner without the consent of the other Partners from any transaction concerning the Partnership or any use by that Partner of the Partnership property, name or business connection. This duty continues to apply to any transactions undertaken after the Partnership has been dissolved but before the affairs of the Partnership have been completely wound up by the surviving Partner or Partners or their agent or agents.
  83. Duty to Devote Time
  84. Each Partner will devote such time and attention to the business of the Partnership as the majority of the Partners will from time to time reasonably determine for the conduct of the Partnership business.
  85. Forbidden Acts
  86. No Partner may do any act in contravention of this Agreement.
  87. No Partner may permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Partner in the Partnership.
  88. No Partner may do any act that would make it impossible to carry on the ordinary business of the Partnership.
  89. No Partner may individually consent to a judgment against the Partnership.
  90. No Partner will have the right or authority to bind or obligate the Partnership to any extent with regard to any matter outside the intended purpose of the Partnership.
  91. Any violation of the above Forbidden Acts will be deemed an Involuntary Withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.
  92. Indemnification
  93. All Partners will be indemnified and held harmless by the Partnership from and against any and all claims of any nature, whatsoever, arising out of a Partner's participation in Partnership affairs. A Partner will not be entitled to indemnification under this section for liability arising out of gross negligence or wilful misconduct of the Partner or the breach by the Partner of any provisions of this Agreement.
  94. Liability
  95. A Partner will not be liable to the Partnership, or to any other Partner, for any mistake or error in judgment or for any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement or the Partnership.
  96. Liability Insurance
  97. The Partnership may acquire insurance on behalf of any Partner, employee, agent or other person engaged in the business interest of the Partnership against any liability asserted against them or incurred by them while acting in good faith on behalf of the Partnership.
  98. Life Insurance
  99. The Partnership will have the right to acquire life insurance on the lives of any or all of the Partners, whenever it is deemed necessary by the Partnership. Each Partner will cooperate fully with the Partnership in obtaining any such policies of life insurance.
  100. Amendments
  101. This Agreement may not be amended in whole or in part without the unanimous written consent of all Partners.
  102. Governing Law and Jurisdiction
  103. This Agreement will be construed in accordance with and exclusively governed by the laws of New Zealand.
  104. The Partners submit to the jurisdiction of the courts of  for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement.
  105. Definitions
  106. For the purpose of this Agreement, the following terms are defined as follows:
    1. "Additional Capital Contributions" means Capital Contributions, other than Initial Capital Contributions, made by Partners to the Partnership.
    2. "Capital Contribution" means the total amount of cash or Property contributed to the Partnership by any one Partner.
    3. "Dissociated Partner" means any Partner who is removed from the Partnership through a voluntary or involuntary withdrawal as provided in this Agreement.
    4. "Expulsion of a Partner" can occur on application by the Partnership or another Partner, where it has been determined that the Partner:
      1. has engaged in wrongful conduct that adversely and materially affected the Partnership's business;
      2. has wilfully or persistently committed a material breach of this Agreement or of a duty owed to the Partnership or to the other Partners; or
      3. has engaged in conduct relating to the Partnership's business that makes it not reasonably practicable to carry on the business with the Partner.
    5. "Initial Capital Contribution" means Capital Contributions made by any Partner to acquire an interest in the Partnership.
    6. "Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy.
  107. Miscellaneous
  108. Time is of the essence in this Agreement.
  109. This Agreement may be executed in counterpart.
  110. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
  111. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
  112. This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties.
  113. This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Partner's successors, assigns, executors, administrators, beneficiaries, and representatives.
  114. Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
  115. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.

IN WITNESS WHEREOF the Partners have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________


WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________


Last Updated March 12, 2024

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What is a Partnership Agreement?

A Partnership Agreement is a contract between you and your partner(s) that sets out the partners' obligations to each other and the partnership.

New Zealand law defines a partnership as the relationship between persons carrying on a business in common with a view to profit.

The Partnership Law Act 2019 provides a default set of rules for the operation of partnerships in New Zealand. However, we recommend that partners enter into a Partnership Agreement to customise the partnership's rules to their needs and expectations.

Without such a written agreement in place, the New Zealand Partnership Law Act 2019 will apply unamended to the operation of the partnership, which may lead to some unintended consequences.

For example, under the Act, any partner can dissolve the partnership by giving notice to the other partners. If that is not what the partners want, they need an agreement that deals with what happens when a partner wants to leave.

A Partnership Agreement is a private contract between partners and doesn’t need to be registered.

A Partnership Agreement is also known as a Business Partnership Agreement.

What is a general partnership?

A general partnership is one of several types of partnership. It occurs when two or more people agree to start a business together. All partners are liable for the decisions made by each partner on behalf of the partnership and equally share all assets, profits, and financial and legal liabilities. However, this rule can be amended in your Partnership Agreement if it doesn't suit your situation.

A general partnership is also known as a Business Partnership or firm.

How do I write a Partnership Agreement in New Zealand?

1. Outline the basic information

You’ll want to have a clear understanding of your partnership's purpose before you get started on your Partnership Agreement.

Meet with your partner(s) and outline the:

  • Business name: Reserve or register your partnership’s name by applying for a New Zealand Business Number. You can also gain exclusive rights to the name by applying for a trademark with IPONZ.
  • Purpose of the business: Describe the expected activities and goals of your business. For example, if your partnership is a plumbing company, your purpose is to provide plumbing services to your community.
  • Partnership's duration: Most partnerships end because of the partners' eventual decision or some other intervening event. However, there are also situations in which having the partnership end on a specific date is more appropriate. LawDepot’s Partnership Agreement template allows you to choose between a fixed-term or an indefinite end date.

2. Describe each partner’s capital contributions

Contributions to the partnership can be in the form of money, resources, or services. Each partner's contributions don't necessarily need to be equal cash contributions.

A Partnership Agreement can include non-monetary contributions as long as the partners can calculate and agree on the contributions' value.

Provide a detailed description of each partner's contributions, as well as a total value of the contributions.

3. Outline the distribution of profits and losses

Decide how the partners will distribute the profit. An equal share is the most common arrangement, but you can also choose between a fixed percentage or in proportion to capital contributions if that better suits your business.

A fixed percentage means each partner will receive a specified percentage of the profits. The percentage doesn't change regardless of the business's amount of profit.

4. State the rules for adding a new partner

Your partnership may eventually want to add new partners. Adding partners can be for many reasons. Perhaps your partnership intends to expand the business and needs a new partner's contributions, or it may need to replace an existing partner.

The partners can pick a voting process for deciding if they will accept a potential partner into their general partnership. LawDepot’s Partnership Agreement template gives you the option of a majority vote or unanimous vote.

A new partner is only liable for any decisions the partnership makes after they become a partner.

5. Outline how a partner can leave

All partners bring value to a partnership, and there should be a strategy in place for handling a partner’s exit. A Partnership Agreement can lay out terms and conditions that protect your partnership from the unexpected withdrawal of a member.

The other partners involved should receive appropriate notice if a partner decides they want to exit the partnership. Choose between a period of three months, six months, one year, or two years in our template.

You can also decide if dissolving the partnership after a partner's exit is the appropriate course of action for your business.

6. Determine terms for the partnership’s dissolution

Ending a partnership is a major decision that can have different consequences for each partner. Generally, we recommend that you require a unanimous vote to dissolve your general partnership.

How the assets of your business get distributed among the general partners may be a factor in how each member votes in the decision to dissolve the partnership.

Unless specified otherwise, the options for distributing assets among the general partners are:

  • Equal shares for each partner
  • In proportion to capital contributions
  • Fixed percent

The partners should also discuss remuneration. This is when the partners are paid back money for their work and service and is separate from the profits.

7. Outline requirements for an annual report

You must include the partnership’s income tax report in the annual report to partners. You must tell the Inland Revenue Department (IRD) about the formation of a partnership. It will then give your business an IRD number for income tax and GST purposes.

A business must pay GST if its income on goods and services for the year is over $60,000.

Each partner also needs a copy of the income tax report to pay taxes on their individual income and profit from the partnership.

In addition to an income tax report, LawDepot’s Partnership Agreement template allows you to choose other reports to include in your annual reports, such as:

  • Supporting income statement
  • Balance sheet
  • Cash flow statement
  • Profit and loss summary

8. Determine voting terms

Partners are liable for decisions made on behalf of the partnership regardless of whether they have all been involved or consulted. Creating rules may stop an overzealous partner from binding the partnership in a contract before discussing it with the other partners.

Some decisions can completely change the nature of your business, which can bring unanticipated risk to partners that aren’t as financially secure as the others. Requiring a unanimous vote for significant decisions can minimise this risk.

On the other hand, a unanimous vote also gives each partner the authority to veto any decision.

You and your partners may find it more appropriate to have various voting procedures depending on the situation. For example, business decisions can require a majority vote, while financial decisions need a unanimous vote.

In some instances, it may be appropriate to restrict the authority to bind the partnership to a contract to a select few partners.

It's necessary to inform third parties, vendors, and business associates about any changes to the partners’ presumed authority.

9. Sign the Partnership Agreement

A Partnership Agreement doesn’t need a witness for it to be legally binding. However, it’s a good idea to have one if the execution of your agreement is ever challenged.

A witness should be a neutral third party who has no personal or business ties to you or the other partners.

What’s the difference between a general partnership and a limited partnership?

General partnerships and limited partnerships are legal entities that are separate from each other.

Only general partners are involved in a general partnership. General partners are often the owners of a business and are involved in day-to-day management. They make decisions on behalf of the business and are liable for all of the partnership’s losses.

In contrast, there needs to be at least one general partner and a limited partner for a limited partnership to exist.

The limited partner, also known as a silent partner or LP, is typically an investor in the business but not involved in the decision-making or day-to-day operations. They can only lose the capital they have invested in the business and nothing more.

Limited partnerships in New Zealand are governed by the Limited Partnership Act 2008.

How does a partnership end?

A partnership can end in multiple ways. You and your partner(s) may end the partnership on your own accord, or you may not have a choice. If the end of your partnership is partner-driven, LawDepot’s Partnership Agreement template gives you the option of choosing between a majority or unanimous vote.

You must decide if the partnership will dissolve on withdrawal of any partner. Additionally, a partnership agreement should have terms and conditions to protect the business from a partner’s unexpected withdrawal. For example, if a partner does decide to exit the partnership, they should provide the remaining partners with a Notice of Withdrawal from Partnership document.

Your partnership must dissolve if there is only one partner left after a withdrawal.

The partnership dissolves if any partner dies or files for bankruptcy unless otherwise specified in the Partnership Agreement.

The court may dissolve a partnership if it decides:

  • A partner is mentally impaired and lacks the competence to manage their own affairs.
  • A partner is permanently incapable of fulfiling their obligations to the partnership.
  • An event occurs that makes it unlawful for the partnership business to continue or for the partners to continue the company as a partnership.
  • A partner is guilty of conduct that, in the opinion of the court after considering the nature of the business, is calculated to negatively affect the carrying on of the business.
  • A partner intentionally breaches the Partnership Agreement or acts in a manner that makes it not reasonably practical for the other partners to continue the business in a partnership.
  • The partnership business can only continue while operating at a loss, or circumstances have made it just and fair to dissolve the partnership.

When a partnership comes to an end, it must liquidate its assets, pay its debts, and divide the surplus among the partners according to the distribution of assets provisions of the partnership agreement.

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