Dissolve Partnership Agreement Introduction
Dissolve Partnership Agreement
Dissolving your Partnership Deed – for the Australian Taxation Office
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.
Closing a partnership has additional requirements to vesting a Unit Trust or winding up a Family Trust.
Why end a partnership?
There are many reasons why it may have become necessary or prudent for you to dissolve your partnership. They include:
- Partnership has achieved its original purpose – This may be the case if your partnership was created to serve a specific purpose, such as to conduct the business affairs of a person, or to look after a business that is now sold.
- The partners are not able to continue – The partners may no longer be able to continue in their role. A partner may have died. A partner or partners don’t want to be in business together.
- The partners may wish to terminate the partnership – The partners may wish to terminate the partnership because they have taken their capital (or equivalent) under the partnership.
- The partnership is insolvent
- There is a court order to end the partnership
End your partnership legally to avoid future financial problems
“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.
Deed of Dissolution – Partnership. Why dissolve a partnership?
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.
Process to end an Australian partnership
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.
Build the Dissolve a Partnership Agreement on our law firm website. You get:
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
Can’t find the original Partnership Deed?
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.
Deed complies with each State
The Partnership Deed of Dissolution complies with each Australian jurisdiction:
- Partnership Act 1963 (ACT)
- Partnership Act 1892 (NSW)
- Partnership Act 1997 (NT)
- Partnership Act 1891 (QLD)
- Partnership Act 1891 (SA)
- Partnership Act 1891 (TAS)
- Partnership Act 1958 (VIC)
- Partnership Act 1895 (WA)
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
Mobile: 0477 796 959
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Email: [email protected]
Skype: brettkennethdavies