You had a partnership. It has finished. There are no assets left in the partnership. It is now time to dissolve the partnership. A Dissolution of a Partnership Deed legally ends your partnership. Build this deed of dissolution of partnership. It states how the partners agree to dissolve the partnership.
There are many reasons why it may have become necessary or prudent for you to dissolve your partnership. They include:
“But I left the partnership. I am no longer there. Why am I still liable for the ongoing partnership debts?’
Perhaps a partner is unhappy and leaves. Sadly, the outgoing partner remains liable for current and future debts. If you do not sign a Dissolution of Partnership the outgoing partner continues to be at risk. The outgoing partner is sued for debts of the remaining partner. The ATO still requires you to pay GST and partnership taxes.
Whatever the reason, a Dissolution of Partnership must be signed to legally end a partnership.
In some States and Territories, there is an additional requirement to advertise. When you build the Dissolve a Partnership Agreement you also get a covering letter. It sets out everything you need to do to legally end the trust.
This is how to dissolve a partnership:
1. Distribute all capital to the partners
2. Build Debt Forgiveness Deeds to forgive loans owed to the partners
3. Your Accountant prepares any outstanding tax returns and prepares a Partnership balance sheet showing nil assets.
4. Build and sign the Dissolution Deed. It comes with minutes and a letter of advice.
1. Dissolution of Partnership deed (just print and sign)
2. Minutes for your Accountant’s due diligence file
3. law firm Letter of Advice setting out exactly what you need to do to end the partnership
Best practice is that you had a Partnership Deed. But let’s say you either never had one or you lost it. It does not matter. Press the above Start button. The Deed of Dissolution works whether you had a Partnership Deed or not.
The Partnership Deed of Dissolution complies with each Australian jurisdiction:
Have a look at the Sample document, training videos and hints. They help you as you build the Unit Trust Vesting Deed.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
Australia wide law firm
Head Office: 39 Stirling Highway, Nedlands, WA
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