On this page
- Find out the rules surrounding ending a partnership
- Find out the rules surrounding ending a limited partnership
- Contact Consumer Affairs Victoria for more information
If all the partner(s) are not in agreement about the dissolution of the partnership, the exiting/retiring partner may continue to be liable for debts and defaults if the business continues to be run by the remaining partner(s).
Ending a partnership
Any partner can – subject to any agreement that's in place – end the partnership and effectively bring the business to a close.
Partnerships may be dissolved when:
- the term of the partnership has expired
- one partner has given notice to the other partner(s)
- the partnership is now illegal – for example, one partner can no longer legally own a business
- there is a court order
- there is a death of a partner – or the business has gone bankrupt.
When a partnership is dissolved or a partner retires, according to S41 of the Partnership Act 1958, a notice must be placed in a Government Gazette and in at least one newspaper circulating in each district in which the business operates.
If the notice is not signed by the remaining partner(s), the exiting/retiring partner will continue to be at risk of being sued for debts and defaults of the remaining partner(s) after the dissolution.
In the absence of a written agreement, S48 of the Partnership Act 1958 sets out the rules on how the assets of the business are to be disposed of.
Ending a limited partnership
There's a different process for ending a limited partnership.
To end a limited partnership, you need to notify Consumer Affairs Victoria (CAV), as well as fill out the notice of dissolution or cessation of a limited partnership form within seven days of ending a limited partnership.
There are three ways a limited partnership can end:
1. Changing from being a limited partnership
A limited partnership can be ended only when it has no more limited partners. This means all limited partners take on unlimited liability – or leave the partnership.
It also requires all the partners to agree to change the business from being a limited partnership to a partnership in which all partners equally share in the management and liabilities of the business.
2. Dissolving a limited partnership
Subject to the terms of the partnership agreement, there are certain restrictions when dissolving a limited partnership.
A limited partner cannot dissolve a limited partnership by issuing a notice on their own. The general partner(s) – or the other limited partner(s) – cannot dissolve a limited partnership on the basis that the limited partner:
- has allowed their share of the partnership property to be used as collateral (charged for) debts outside of the partnership
- has died
- has become bankrupt
- has retired
- is a body corporate and has become dissolved.
3. Winding up a limited partnership
When the partners agree to wind up a limited partnership, it must be carried out by the general partners, unless a Court or Tribunal orders differently.
Want to know more?
For more information on dissolution of a limited partnership, visit Consumer Affairs Victoria or call 1300 55 81 81.