What is a notice of dissolution of partnership?
A notice of dissolution of a partnership firm is a notice, that is written and issued by a partner, and is addressed to the other partner/s of the firm. In this notice, the partner informs his other partners, that he is no longer willing to work with them under the name of the partnership firm, and that the assets need to be sold to settle the liabilities, and the remaining assets need to be distributed accordingly. However, this notice can also be addressed to other stakeholders, such as suppliers, customers, government organizations, etc.
What to include in a notice of dissolution of partnership?
In a partnership, if one partner wants to end a partnership, it automatically ends, if it is not stated otherwise in the partnership agreement. A partner may have his reasons to dissolve the partnership firm, some of which are:
- He may believe that there are fewer chances of growth of the company.
- He may think the financial position of the firm is not stable, and the business cannot continue in the long term.
- The competition has increased, and he does not believe that the firm can successfully compete in the market anymore.
- The market share is declining continuously.
- The firm has huge debts, and the insolvency is inescapable anyway.
- He may have personal and professional conflicts with other partners or the philosophies of the firm.
- He may need to start a different business.
- He may want to invest his money somewhere else.
- He may want money for his personal reasons.
Despite the reason, if a partner wants to dissolve, he will send a notice of dissolution of the partnership firm to his other partners. The content of the notice may vary as per the circumstances and reasons of dissolution as well as the type of addressee. However, generally, the following information is included in the template of such notice:
- Details of the addressee/s.
- Details of the addressor.
- Notification of dissolution.
- Effective date of dissolution.
- Reason of dissolution.
- The settlement of assets and liabilities.
- A good ending note.
- Salutation and signature.
This notice is a formal document, which can be used as a reference and evidence, even for legal purposes. The legal documentation of the partnership’s dissolution may also be based on this document. Furthermore, it can be used to clarify any sort of misunderstandings and confusion.
In accordance with the law and regulations of business in London, notice is hereby given that the partnership firm owned by Patrick Dempsey (Partner 1) and Eric Dane (Partner 2) doing business in the name of Orient Textiles on Main boulevard has been dissolved by the mutual consent of both partners effective from 28th February 20XX.
Rules and regulations that shall be followed by the partners amid the firm dissolution are mentioned below,
- Partners shall appoint any 3rd individual with mutual consent to ensure that the process occurs smoothly.
- Both partners shall clear all the received orders of the firm before the concluding date to avoid nuisance among valued customers.
- All the debts and other expenses of the firm shall be cleared by the partners before the dissolution.
- Partners shall release a joint statement to aware customers about the dissolution of firm.
- No partner shall spread any false rumours about other partner to gain sympathy.
- Serious actions shall be taken against the partners who spread any negative comment about other partner.
- No partner will be allowed to use same name and style for their next venture.
- In case of any dispute, decision of 3rd individual would be considered.
- Both partners will clear all the liabilities and remaining assets will be divided equally in the presence of 3rd individual.
- All the social media handles of the firm will be deleted immediately after the wind-up.
- Both individuals can partner up for another business following partnership agreement.
- Both partners shall face serious consequences from the government of London if they fail to abide by above mentioned rules.
Partner 1. Patrick Dempsey
Address: East River Road, London
Partner 2. Eric Dane
Address: 64, Moon Street, London
Address: East Hamptons, London
File: Word (.docx) 2007+ and iPad
Size 28 Kb