Partnership Dissolution Letter

When and how to use this letter

Send this letter as soon as the decision to dissolve is final, and respect the notice period in your original partnership agreement. Deliver it as a signed hard copy and also email a scanned PDF so there is a dated record. Keep proof of delivery.

Use a calm, factual tone. Even if the breakup is difficult, the letter is a legal record, not a place for blame. State the effective date, reference the agreement clause that allows dissolution, and summarize the settlement terms you both discussed.

Include what to avoid: do not withdraw funds or sell partnership assets unilaterally after the decision is made. Do not stop paying suppliers or staff in the hope the other partner will cover it. Every action between now and the final settlement should be joint and documented.

What happens next: prepare final accounts with an accountant, clear all liabilities, distribute remaining assets per the agreed terms, and sign a formal dissolution deed. Then file the dissolution with the registrar and tax authorities, close joint bank accounts, and cancel registrations, licenses, and GST or tax numbers in the firm's name.

A non-obvious tip: notify major clients and suppliers in writing that the partnership is dissolving and who will handle pending orders. This prevents confusion, protects both partners from liability for orders placed after the split, and preserves goodwill you may each need later.

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