A partnership is a type of business structure where two or more people operate a business together. However, no matter how strong the business relationship may seem initially, it may sour for a number of reasons including:
* financial disputes
* different visions and priorities for the business
* underperformance by one of the partners
* personality conflicts
* unequal profit-sharing
In some cases there will be a written partnership agreement that will govern the resolving of disputes between partners and the dissolving of the partnership if necessary. If there is no such agreement then there are various options available including:
1. negotiating the ending of the partnership with the other partner/s
through correspondence resulting in a Deed of Partnership Dissolution;
2. mediation by an independent mediator who attempts to bring the parties
together concerning the terms for a Deed of Partnership Dissolution; and
3. if the above methods do not work then an application can be made to the
Supreme Court of NSW for the dissolution of the partnership (under
section 35 of the Partnership Act 1892) on certain grounds including
where circumstances have arisen that it is just and equitable that the
partnership be dissolved.
Of course, going to Court is a last resort involving considerable time and expense so negotiation or mediation is a preferred option.
If you want to exit a partnership it is not only important but necessary to deal with it straight away to reduce the disruption to not only the business but your personal life.
February 2023