Dissolution of Partnership Deed

Dissolution of Partnership Deed is used where the partners unanimously decide to cease trading and wind up the partnership completely. It helps the partners record how the partnership will be brought to an end and how the winding up will be managed.

On dissolution, the partners will need to decide how the net assets will be realised, how the partnership liabilities will be discharged, and how the winding up process will be handled.

What does Dissolution of Partnership Deed do?

It documents the agreed dissolution of the partnership and the arrangements for winding up the business.

What does Dissolution of Partnership Deed cover?

It is drafted on the basis that:

•  the dissolution is a complete winding up
• the business is solvent
• the partnership is governed by an existing partnership agreement that permits dissolution without imposing onerous terms (it is advisable to check the relevant agreement before settling the dissolution terms)
• the partnership has no employees

Where some partners wish to continue the business after the formal dissolution, the relevant parties should enter into a separate asset purchase agreement for the specific assets concerned.

The deed is drafted as a deed because there may be no consideration for the arrangements, and deeds are generally enforceable despite any lack of consideration.

This deed does not cover the tax implications of dissolution. It is recommended that independent tax and accounting advice is sought.

When should you use Dissolution of Partnership Deed?

Use it when the partners have unanimously decided to stop trading and bring the partnership to an end by winding it up in full.

Dissolution of Partnership Deed is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.