Legal Question in Business Law in California

Re: Dissolving a Partnership

First, note that there is a difference between dissolution of a partnership and withdrawal of a partner. Also, dissolution of a partnership does not immediately terminate the partnership; it continues to have some viability until its affairs are wound up.

To continue, a partnership can be dissolved by: (1) expiration of its term of existence as fixed in the partnership agreement; (2) withdrawal or admission of a new partner unless the agreement provides otherwise; (3) expulsion of a partner; (4) death or bankruptcy of a partner; (5) court decree; and (6) express choice of partner.

With respect to withdrawal and express choice, note that participation in a partnership is voluntary. A partner can quit at any time; however, such a withdrawing partner may become, or remain, liable to other partners and/or outsiders for his contract(s) with the partnership, the other partners individually, or with persons the partnership has done business with.

Step one is to read the partnership agreement carefully to see what it says about dissolution. In particular, look for provisions stating that the partnership is not dissolved by withdrawal of a partner, etc.

If there is no written agreement, the above-listed methods/causes of dissolution should work.

If the reason for your inquiry is a major dipute with other partners or possible personal liability for partnership obligations, you should obtain an initial consultation (at least) with an attorney specializing in business law.