Dissolving a Partnership without an Agreement

Dissolving a Partnership Without an Agreement: What You Need to Know

Starting a business with a partner can be an exciting venture, but it’s also important to plan for the worst-case scenario. Although most partners expect their collaboration to last, situations may arise that require a change in the partnership or its dissolution. When a partnership disintegrates without a prior agreement, the process can be more complicated, and emotions can run high. In this article, we’ll discuss how to dissolve a partnership without an agreement.

What is a Partnership Agreement?

A partnership agreement is a legal document that outlines the terms of the partnership, including how profits and losses are divided, what responsibilities each partner assumes, and how the partnership will operate. It is essentially a contract between the partners that provides a clear framework for decision-making, conflict resolution, and the dissolution of the partnership.

Why is a Partnership Agreement Important?

Having a partnership agreement can be crucial for the smooth operation of the business. It clarifies the rights and obligations of each partner and establishes a protocol for resolving disputes. Without a partnership agreement, partners may face conflicts that could have been avoided if they had established clear expectations from the outset.

How to Dissolve a Partnership Without an Agreement

If there is no partnership agreement in place, the process of dissolving the partnership can be more challenging. Here are some steps to follow:

1. Discuss the Dissolution

The first step is to discuss the dissolution of the partnership with your partner. Try to approach the conversation in a calm and respectful manner. Explain your reasons for wanting to dissolve the partnership and listen to your partner’s perspective. If possible, try to reach a mutual agreement on how to proceed.

2. Determine How to Divide Assets and Liabilities

Once you and your partner have decided to dissolve the partnership, you will need to determine how to divide the assets and liabilities. This can be a complicated process if there is no agreement in place. You will need to review all financial records and determine what each partner is entitled to based on their contributions to the partnership.

3. Notify the Relevant Parties

After you have reached an agreement on how to divide the assets and liabilities, you will need to notify the relevant parties. This could include clients, vendors, or employees. You should also file the necessary paperwork with your state’s business registration office to dissolve the partnership formally.

4. Seek Legal Advice

If you and your partner are unable to reach an agreement on how to dissolve the partnership or if there are legal issues involved, it may be necessary to seek legal advice. An experienced lawyer can help you navigate the legal process and protect your rights and interests.


Dissolving a partnership can be a challenging and emotional process, especially if there is no partnership agreement in place. However, by following the steps outlined above and seeking legal advice if necessary, you can ensure a smooth transition and protect your interests. Remember to approach the process in a calm and respectful manner and focus on finding a mutually agreeable solution.