Last Updated February 27, 2024
Notice of Withdrawal from Partnership
Alternate Names:
A Notice of Withdrawal from Partnership is sometimes referred to as a:
- Notice of Retirement from Partnership
- Deed of Retirement from Partnership
- Resignation from Partnership Letter
- Dissolution of Business Partnership Letter
What is a Notice of Withdrawal from Partnership?
A Notice of Withdrawal from Partnership (also known as a Notice of Retirement from Partnership) is served as written notice that a business partner (or party) has left the partnership for voluntary or involuntary reasons. This notice can be used for general partnerships or limited partnerships.
What are the two types of partnership withdrawal?
Withdrawal from a partnership can either be voluntary or involuntary.
A voluntary withdrawal means that the business partner has willingly decided to leave the partnership for one reason or another. For example, a common reason why a business partner might withdraw from a partnership is because they are retiring. In this case the withdrawing partner serves the notice on the partnership.
An involuntary withdrawal is served when the majority of the parties in a business partnership collectively decide that one partner should be removed from the partnership. This could be for any number of reasons, such as that the partner has passed away, was criminally convicted, or is found to be incompetent. In this case the remaining partners serve the notice on the withdrawing partner or the withdrawing partner's estate or legal representative.
How are assets distributed when a partner withdraws?
Specific rules regarding distribution of assets are indicated in the Partnership Agreement. This can include things like a buyout offer (when the remaining business partners are able to purchase the equity that the leaving partner has in the firm) which can take place during the notice period indicated in the partnership withdrawal letter.
