Partnership Dissolution Agreement

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									This Partnership Dissolution Agreement is an agreement between partners whereby
they agree to the dissolution of the partnership. Disputes often stem from confusion or
disagreements about the distribution of funds or property after a partnership dissolves,
this agreement can help avoid these disputes by providing a detailed dissolution
process. This agreement sets out the procedure of liquidation, how debts and liabilities
of the partnership are assumed, and how the proceeds from liquidation are divided
amongst the partners. This document can be customized to fit the unique needs of any
partnership that is going to dissolve.
This Partnership Dissolution Agreement is hereby made on this ____ day of _______, 201__
[DATE OF THIS AGREEMENT] by and between __________________ [NAME OF 1st
PARTNER; SEE INSTRUCTION, BELOW] (“Party 1”) of ________________ [ADDRESS
OF 1st PARTNER], ______________ [NAME OF 2nd PARTNER] (“Party 2”) of
___________________________             [ADDRESS          OF       2nd     PARTNER],        and
________________________           [NAME       OF     3rd     PARTNER]        (“Party 3”)    of
___________________ [ADDRESS OF 3rd PARTNER]. {Instruction: Delete the parts
relating to Party 3, above, if there are only 2 partners in this partnership. Add as many other
partners as necessary (identifying them by name and labeling them Party 4, 5, etc.) and their
addresses, if partnership has more than 3 partners.}

{Instruction: One partner will have to assume the responsibilities of closing down the
partnership, and will be reimbursed and compensated for these efforts. Make sure to
designate this “Liquidating Partner” as Party 1. The order that all other partners are listed
does not matter.}

WHEREAS, the parties hereto (“Partners”) entered into a partnership with one another (the
“Partnership”) pursuant to a written partnership agreement dated _____________,______
___________________ [DESCRIBE BUSINESS OF PARTNERSHIP] with principal offices
at __________________________ [CURRENT, OR MOST RECENT, ADDRESS OF
PARTNERSHIP] under the name _________________; and

WHEREAS, this Agreement is entered into by Partners to provide for the dissolution and orderly
winding up of the Partnership business.

covenants and agreements herein contained and subject to the terms and conditions hereinafter
set out, the parties hereto agree as follows:

1.    Partners hereby agree the Partnership will be dissolved, effective _____________, 201__
[DATE PARTNERSHIP WILL END] (the “Dissolution Date”) and the Partnership will be
wound up and liquidated as of and following the Dissolution Date.

2.      Party 1 shall be appointed as the “Liquidating Partner” and be vested the exclusive right
to liquidate and wind up the Partnership. Effective the Dissolution Date, no other Partner shall
cause to act on behalf of or bind the Partnership or represent in an official capacity or manage
and control the Partnership for the purposes of its liquidation.

3.      Party 1 shall receive a fee of ______________ dollars ($___) for serving as the
Liquidating Partner, which shall be treated as an expense for winding up the Partnership and
shall not be charged to the capital account of Party 1 as a withdrawal. Other than the liquidation
proceeds, none of the Partners shall be entitled to any form of compensation, make withdrawals

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or receive any interest on their contributions or respective shares of the Partnership capital after
the Dissolution Date.

4.      Party 1 shall be responsible for the liquidation and winding up of the Partnership in
accordance with this Agreement and as per law. Party 1 shall do all such things as may be
required to liquidate the Partnership and shall have the authority and full power to sell and
transfer Partnership assets, engage professional services, sign and submit tax matters, execute
and record the Statement of Dissolution of Partnership, pay and settle debts, and distribute
Partnership assets to the respective Partners. Party 1shall keep the remaining Partners informed
of the status of the dissolution until the Dissolution Date.

5.      Effective the Dissolution Date, liquidation proceeds shall be first applied to pay all debts
and liabilities of the Partnership, and will be assumed by Partners pro rata in the same
proportion. All of the assets and proceeds of the Partnership, if any remaining after paying all
debts and liabilities, will be distributed to Partners, pro rata, in accordance with their respective
interests in the Partnership and in the following manner:

Party 1:          ________ percent (%__); ______________ dollars ($__); on ________________
Party 2:          ________ percent (%__); ______________ dollars ($__); on ________________
Party 3:          ________ percent (%__); ______________ dollars ($__); on ________________

{Instruction: For Party 1 and each other partner, specific type and amount of payment that
will be owned to this particular partner upon the dissolution of the partnership. This might be
a specific dollar amount, or, it might be a percentage. The amounts or payments might be the
same for each party, or, might be very different. If known, also give details as to when each or
all payments will be made. Be as complete as possible in detailing all of the above in this

{NOTE: In situations where partnerships end, many disputes stem from confusion or
disagreements about the distribution of funds and/or property that remains after the
Partnership is no longer in legal effect. Therefore, when drafting this section, all partners are
encouraged to first think carefully about how this process will be done, and ensure that, when
drafting this Agreement, enough specific details are included so as to avoid later confusion or

6.      Each Partner hereby indemnifies and saves harmless the other Partner from and against
any claims, demands, actions, losses, and damages suffered by such Partners resulting from the
failure of that Partner to pay and discharge any portion of any Partnership liability that such
Partner has assumed by virtue of this Agreement.

7.      Partners hereby release and forever discharge one another from any and all claims,
demands, actions, losses, or damages whatsoever arising from or relating to the Partnership, with
the exception of any claims, demands, actions, losses, or damages arising from or resulting from
the terms and conditions of this Agreement.

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8.     This Agreement shall enure to the benefit of and be binding upon the respective heirs,
executors, administrators, and assigns of each of the parties hereto.

9.      {Instruction: Add Additional provisions, if necessary, to cover circumstances specific to
your partnership’s situation. For example, if there had been contribution of personal assets
by a specific partner, that partner’s property would need to be dealt with; there should be
specific language in this Agreement discussing how that particular property will be disposed

10.    This Agreement is executed in the State of _________. If any partner or Partners dispute
any portion of this Agreement, now or in the future, all parties agree to submit to the jurisdiction
of the County of _________________, State of _____________. [PROVIDE LOCATION—

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.

Print name of Party 1                                               Signature

Print name of Party 2                                               Signature

Print name of Party 3                                               Signature

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