Two people talk at a desk in an office. Papers and pens are on the desk.

Your business partnership dissolves if you:

  • close your business
  • change who is in the partnership.

If you’re changing business partners, check if you need to form a new or reconstituted partnership with the Australian Taxation Office.

Reasons for ending a partnership

A business partnership can end because:

  • the agreed partnership term finishes
  • a partner gives written notice to leave
  • a partner can no longer legally run a business
  • a court orders the partnership to end
  • a partner becomes bankrupt
  • a partner dies
  • the business is insolvent.

Partnership agreement

Your partnership agreement (if you have one) sets out the terms and conditions of your partnership. Check it for details about ending the partnership. If it doesn't have details about ending the partnership, you'll need to either write a dissolution agreement or follow your state or territory's laws.

Dissolution agreement

Even if you have a partnership agreement, consider writing a dissolution of partnership agreement. This is a formal contract that covers:

  • why the partnership is ending
  • the date the partnership will end
  • how you’ll divide assets and debts
  • a final summary of the business’s finances
  • who will handle any remaining business tasks
  • how you’ll handle clients, contracts and employees
  • who will own any intellectual property and business name (if applicable).

Laws you need to follow

Partnership Act

States and territories have their own partnership Acts. You must follow the relevant Act when:

  • you don't have a written partnership or dissolution agreement
  • your agreement doesn't cover something that the Act requires.

Check your state or territory’s Act:

Other state and territory laws

Each state and territory may have extra rules you need to follow when you dissolve your partnership. For example, you might need to publish a notice in a government gazette or newspaper that tells people the partnership is dissolving.

Check with your state or territory's government business authority to see if there are any extra rules you need to follow.