Unlike more formal types of business structures, a general partnership promotes a level of business intimacy among the partners that is based on a "one for all" legal framework. It can be difficult to tell a partner or partners that you want to dissolve the business relationship. Putting the decision in writing ensures that you have a record of exactly when and how the partnership came to an end.
A general partnership is one of the easiest ways to set up a business. When two or more people agree to act together to make a profit, a general partnership begins. In most states, no paperwork needs to be filed to legitimize the business. Likewise, state laws allow the dissolution of a partnership just as easily. Unless the partners have agreed to something different, a partner can withdraw from a partnership at will simply by conveying his intent to do so. The intent to withdraw can be conveyed orally or in writing and doesn't have to adhere to any particular format.
States allow partnerships to adopt policies to govern their affairs that can trump most of the default provisions of state partnership law. A partnership agreement can set the procedures for a partner to properly end the partnership. A typical partnership agreement requires written notice of a partner's intent to withdraw and may also require the notice to come up to 90 days in advance of the effective date. The agreement can set other terms, such as requiring the notice to be sent by registered mail to a specific address.
Your withdrawal from the partnership doesn't necessarily require the dissolution of the company. If you have only one partner, dissolving the business and dividing the proceeds makes sense. However, if you have multiple partners, they may want to continue without you. In that instance, you may want to accept a buyout, or you may want to force a complete dissolution of the existing partnership so you can take back important assets or end personal obligations. The remaining partners would then be free to form a new partnership without you.
No formalities must be follow when writing a letter to dissolve a partnership, other than to comply with any requirements detailed in your partnership agreement. An effective letter should address the partners individually and the partnership as an entity. It should express your intention to have the partnership end as of a specific date and detail whether you expect a complete dissolution of all partnership matters or are amenable to a buyout. Sign and send the letter to all partners, preferably by registered mail so you have proof of receipt.
