Partnership Dissolution

  • Blog
  • Partnership Dissolution
View All Articles

Scroll for more

I often get approached by clients in dispute with their business partners. If you are in a partnership, and in a dispute with the other partner/s, it is important to know how the dispute will be managed.

How is a partnership regulated?

If there is a partnership agreement between the partners, this will be the first point of call for the partners.

A partnership agreement is a contract between the partners. The purpose of a partnership agreement is to regulate the relationship and interaction of the partners. A partnership agreement will generally outline things such as:

  1. The type of business of the partnership;
  2. The term of the partnership (if there is a term);
  3. Management of accounts for the partnership;
  4. Termination of the partnership; and
  5. Selling of the partnership property.

Partnerships are also governed in Queensland by the Partnership Act 1981 (Qld). However, this legislation will not apply where a contrary intention appears in the partnership agreement.

Dissolving a partnership (Partnership Dissolution)

Where the parties are unable to agree on the terms of the partnership agreement to dissolve the partnership, the Partnership Act 1981 (Qld) provides for this.

Subject to the partnership agreement, the Partnership Act 1981 (Qld) provides that a partnership is dissolved where:

  1. the partnership is for a fixed term, at the end of this fixed term;
  2. the partnership is for a single undertaking, at the end of this undertaking;
  3. the partnership is for an undefined term, at the point where a partner provides notice to the other partner of its intention to dissolve the partnership.

What happens when a partnership is dissolved?

Upon the dissolution of the partnership, it is necessary for the partners to wind up the partnership. This includes selling assets, settling any debts, and then distributing any profits of the partnership to the partners.

A partnership agreement will generally outline how a partnership is to be wound up. For example, the partnership agreement may state that an independent valuation is to be sought of the partnership property, and the determination of that independent valuation is to be final and binding on the partners.

Where a partnership agreement does not provide for this winding up process, or the partners are unable to agree on the terms of winding up, the partners are able to apply to the Court under the Partnership Act 1981 (Qld) to have the Court make an order to wind up the business and affairs of the partnership. An administrator will then be appointed to conduct the winding up.

If you have any questions in relation to a partnership, a partnership dispute or partnership dissolution, please do not hesitate to contact me.

The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.


Prefer to get in touch?

With offices in Brisbane, Sunshine Coast, North Queensland and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.

Free call 1800 640 509
  • This field is for validation purposes and should be left unchanged.