Practical examples of partnership dissolution agreement examples

Real-world examples of partnership dissolution agreement examples

Lawyers love to say “it depends.” Business owners want to know what people actually do. So let’s start with real examples of partnership dissolution agreement examples that mirror situations many small and mid-sized businesses face.

These are composite scenarios based on patterns seen in case law, sample forms from state small-business resources, and common practice in 2024–2025. They’re not legal advice, but they will help you understand what typically goes into a solid dissolution agreement.

Example of a friendly buyout: Profitable two-partner firm

Imagine a marketing agency with two equal partners. The firm is profitable, no one is angry, but one partner wants to retire and move out of state.

In this scenario, the partnership dissolution agreement examples you’d see usually:

• State that the partnership is dissolved on a specific date, but the business will continue as an LLC owned by the remaining partner.
• Include a buyout price for the departing partner’s interest, often based on a multiple of average net profits over the last three years.
• Spell out a payment schedule — for instance, 20% at signing, the balance over 24 months with interest.
• Allocate responsibility for existing debts and leases, typically with the continuing partner assuming them and indemnifying the retiring partner.
• Address client relationships: the business name, website, and client contracts stay with the continuing partner.

An example of a clause you’d see in these kinds of partnership dissolution agreement examples:

“Partner A hereby assigns all right, title, and interest in and to the Partnership, including all goodwill, trade names, customer lists, and accounts receivable, to Partner B, in exchange for the Buyout Price set forth in Exhibit A.”

This is the classic “we’re fine, we just want different things” dissolution. The agreement is all about valuation, payment security, and a clean transfer of ownership.

Example of a failed startup: Splitting debt and intellectual property

Now picture a three-partner tech startup that never reached product-market fit. The bank loan is maxed out, revenues are tiny, and everyone has a day job offer on the table.

Here, the best examples of partnership dissolution agreement examples focus on two pressure points: who pays the debt and who owns the code.

Common features in this kind of agreement:

• A detailed schedule of all debts, including who personally guaranteed what.
• A proportional allocation of liability: each partner agrees to pay one-third of any remaining partnership debts, with a mechanism for reimbursement if one person pays more than their share.
• A clear IP clause: sometimes the code and domain are sold to one partner for a nominal amount; sometimes they’re licensed to all three for use in future projects.
• A mutual release of claims, so nobody sues later over unpaid sweat equity.

A typical IP paragraph in these examples of partnership dissolution agreement examples might say:

“All software source code, documentation, and related intellectual property developed by the Partnership shall be assigned to Partner C in exchange for Partner C’s assumption of the outstanding equipment lease and vendor obligations listed in Schedule 2. Partners A and B waive any further rights or royalties related to such intellectual property.”

This kind of deal trades ownership for relief from ongoing financial obligations.

Example of a professional practice breakup: Clients and non-solicitation

Law firms, medical practices, and accounting partnerships often dissolve when partners disagree about strategy or culture, not because the business is failing.

Suppose a three-partner CPA firm splits because one partner wants to go solo. In real examples of partnership dissolution agreement examples for professional firms, the hot issues are:

• Who gets which clients.
• Whether anyone can use the old firm name.
• Whether departing partners can solicit staff.

You’ll often see language like:

“Clients listed on Schedule B who have historically been serviced primarily by Partner X shall be deemed ‘X Clients.’ Partner X may solicit and serve X Clients following the Dissolution Date. The remaining Partners may not affirmatively solicit X Clients for a period of 12 months, but may respond to unsolicited inquiries.”

And for staff:

“For 18 months following the Dissolution Date, no Partner shall directly solicit for employment any employee of the former Partnership; provided, however, that this restriction shall not apply to employees who independently seek employment without prior solicitation.”

These examples include careful, negotiated boundaries that balance client choice, partner goodwill, and the reality that everyone needs to keep earning a living.

Example of a dispute-driven dissolution: Misconduct and releases

Sometimes the partnership is ending because one partner allegedly misused funds, violated policies, or simply disappeared. The tone of the agreement shifts: it’s less about friendly exit, more about limiting damage.

In these dispute-heavy examples of partnership dissolution agreement examples, you’ll typically see:

• Very detailed recitals of background facts (without admitting legal liability).
• A settlement payment by one party or by the partnership to close out disputed claims.
• Strong mutual releases and “no admission of wrongdoing” language.
• Confidentiality and non-disparagement clauses.

A sample release clause might read:

“Except for obligations expressly set forth in this Agreement, each Partner hereby releases and forever discharges the other Partners and the Partnership from any and all claims, demands, and causes of action, known or unknown, arising out of or relating to the operation of the Partnership through the Dissolution Date.”

If litigation has already started, the dissolution agreement may be combined with a settlement agreement, referencing case numbers and court orders. Courts in the U.S. often encourage parties to settle and formalize these arrangements, and many state small-business guides stress documenting the deal in writing. For general guidance on business disputes and settlements, the U.S. Small Business Administration provides helpful overviews at sba.gov.

Example of a death or disability dissolution: Estate and insurance payouts

Partnership agreements frequently say the partnership will dissolve if a partner dies or becomes permanently disabled. When that happens, the dissolution agreement implements those terms.

A realistic example of partnership dissolution agreement examples in this context might include:

• A buyout of the deceased partner’s interest by the remaining partners, often funded by life insurance.
• A valuation method tied to a recent appraisal or a formula (such as a multiple of average earnings).
• Clear instructions on payment to the estate and releases from the estate’s future claims.

Typical language:

“Within 90 days of receipt of life insurance proceeds on the life of Partner D, the remaining Partners shall pay the Estate of Partner D the Buyout Price described in Section 4. Upon receipt of such payment, the Estate shall assign all interest in the Partnership to the remaining Partners and execute the Release attached as Exhibit C.”

Because estates and tax consequences are involved, these agreements often reference guidance from the IRS and are drafted with a tax professional’s input. For current federal tax information affecting small partnerships, see the IRS small-business and self-employed resources at irs.gov.

Example of a time-limited project partnership: Winding down cleanly

Not every dissolution is dramatic. Some partnerships form for a single project — a real estate flip, a short-term consulting engagement, or a joint R&D effort — and then end as planned.

In those best examples of partnership dissolution agreement examples, the document is short and focused:

• Confirm the project is complete and all client or customer obligations are satisfied.
• Divide remaining cash or assets according to the original partnership percentages.
• Confirm that all taxes will be filed and who is responsible for preparing final returns.

You might see language like:

“The Partners acknowledge that the Project described in the Partnership Agreement dated June 1, 2023 has been completed and all customer obligations have been fulfilled. After payment of the debts listed in Schedule 1, remaining cash on hand shall be distributed 60% to Partner A and 40% to Partner B. Partner A shall prepare and file the final partnership tax return and provide each Partner with a Schedule K-1.”

As boring as this sounds, these are often the cleanest, least expensive dissolutions — because expectations were clear from day one.

Key clauses you’ll see repeated across examples

If you compare multiple examples of partnership dissolution agreement examples, certain building blocks show up again and again, regardless of industry or size. Most well-drafted agreements will address:

• Dissolution date and process – When the partnership ends, who is responsible for winding up, and what “winding up” includes.
• Asset distribution – Who gets cash, equipment, inventory, IP, domain names, and goodwill.
• Debt and liability allocation – How loans, credit lines, leases, and pending lawsuits are handled.
• Tax and reporting responsibilities – Who files final tax returns, cancels registrations, and handles regulatory notifications.
• Releases and indemnification – Who promises not to sue whom, and who will cover future claims tied to past actions.
• Confidentiality and reputation – How trade secrets and public statements are handled after the split.

In 2024–2025, there’s also more attention to digital assets — cloud accounts, SaaS subscriptions, social media handles, and online advertising accounts. Modern examples include specific schedules listing logins and designating which partner will control or close each account.

For general background on partnership law concepts like dissolution and winding up, the Legal Information Institute at Cornell Law School maintains a respected, plain-language library at law.cornell.edu.

Trends shaping partnership dissolution agreements in 2024–2025

The basic legal framework for dissolving a partnership hasn’t changed much, but how people apply it has. Recent trends influencing the latest examples of partnership dissolution agreement examples include:

• Remote and hybrid businesses – More partnerships operate entirely online. Dissolution agreements now routinely address remote staff, shared workspaces, and global clients.
• Increased focus on data and privacy – With stricter privacy regimes worldwide, agreements are more explicit about who becomes the “data controller” for customer information and who must comply with data deletion or retention rules.
• Side hustles and multi-entity structures – Partners frequently have multiple LLCs, consulting gigs, and investment vehicles. Dissolution agreements are more careful about defining what belongs to the partnership versus what stays personal.
• Dispute prevention – After the pandemic-era spike in business disputes, many attorneys now push for stronger mutual release, mediation, and arbitration provisions in dissolution documents.

If your business handles health-related data or services, it’s worth remembering that dissolving the partnership does not relieve you of privacy or record-keeping obligations. For example, U.S. healthcare partnerships must still comply with HIPAA rules on protected health information; the Department of Health and Human Services maintains detailed guidance at hhs.gov.

Using these examples when you draft your own agreement

You should not copy any one example of a partnership dissolution agreement word-for-word, but you can absolutely use patterns from these examples of partnership dissolution agreement examples to prepare for a conversation with your attorney.

A practical way to use them:

• Identify which scenario looks most like your situation: friendly exit, failed venture, professional practice split, dispute, death/disability, or project completion.
• List the assets, debts, and relationships that matter most in your case: key clients, IP, employees, loans, leases, online accounts.
• Borrow wording concepts — not exact text — for how to handle buyouts, releases, and non-solicitation.
• Bring that list and your questions to a qualified lawyer in your state.

If you’re in the U.S., checking your state’s small-business or secretary of state website is also smart; many publish sample dissolution forms and checklists. The U.S. Small Business Administration’s site at sba.gov has an up-to-date overview on closing or changing a business structure, including partnerships.

FAQ: Partnership dissolution agreement examples

What is an example of a basic partnership dissolution agreement?
A basic example of a partnership dissolution agreement covers the dissolution date, how remaining cash and assets will be divided, who pays outstanding debts, and who will file final tax returns. For a simple two-partner retail shop, the agreement might say the shop will close on a set date, remaining inventory will be sold, net proceeds will be split 50/50, Partner A will pay off the credit card and be reimbursed from the sale proceeds, and Partner B will file the final partnership tax return.

What are some common examples of clauses included in these agreements?
Common examples of clauses in partnership dissolution agreements include mutual releases of claims, confidentiality and non-disparagement provisions, non-solicitation of clients or employees, and detailed asset transfer language for intellectual property, domain names, and customer lists. Many examples also include dispute resolution provisions requiring mediation or arbitration before any lawsuit.

Can I use online examples of partnership dissolution agreement examples without hiring a lawyer?
You can review online examples of partnership dissolution agreement examples to understand structure and typical clauses, but relying solely on them is risky. State laws differ, tax issues can be significant, and your partnership may have specific obligations (like personal guarantees or regulatory licenses) that generic examples don’t address. Using examples as a starting point and then having a local attorney customize the agreement is usually far safer.

Where can I find reliable sample agreements or further guidance?
Look for examples on government or educational sites rather than random downloads. State bar associations, state small-business development centers, and university law clinics sometimes publish sample clauses or checklists. The Cornell Legal Information Institute at law.cornell.edu and the U.S. Small Business Administration at sba.gov are good starting points for high-level guidance.

Do all partners have to sign the dissolution agreement?
In nearly all real examples of partnership dissolution agreement examples, every partner signs. If one partner refuses, you may have to follow the default dissolution rules in your state’s partnership statute and, in some cases, seek court involvement. That’s slower and more expensive, which is why most partners eventually agree to sign a negotiated document that wraps up the relationship in writing.