When business partners decide to part ways, a dissolution of partnership agreement is crucial in ensuring that the process is smooth, fair, and legal. A well-drafted agreement can protect the interests of each partner and help avoid disputes down the line.

Here is a sample dissolution of partnership agreement:

1. Purpose of Agreement

This agreement outlines the terms and conditions of the dissolution of [PARTNERSHIP NAME] (“Partnership”) between [PARTNER 1 NAME] (“Partner 1”) and [PARTNER 2 NAME] (“Partner 2”). The agreement aims to establish a fair and equitable distribution of the Partnership’s assets and liabilities.

2. Termination Date

The Partnership will be terminated as of [TERMINATION DATE]. On this date, the Partnership will cease to exist, and the Partners will be free to pursue their own ventures.

3. Distribution of Assets

The Partners agree to distribute the Partnership’s assets as follows:

a. All cash and cash equivalents will be divided equally between the Partners.

b. [LIST ANY OTHER ASSETS SUCH AS INVENTORY, EQUIPMENT, PROPERTY, ETC.] will be sold, and the proceeds will be divided equally between the Partners.

4. Liabilities

The Partners agree to settle all outstanding liabilities of the Partnership before distributing assets. [LIST ANY OUTSTANDING LIABILITIES SUCH AS LOANS, TAXES, DEBTS, ETC.]

5. Mutual Release

The Partners agree to release each other from any claims, demands, or liabilities arising from the Partnership. This release will be effective upon the execution of this agreement.

6. Confidentiality

The Partners agree to keep the terms and conditions of this agreement confidential and not to disclose them to any third party without the other Partner’s express written consent.

7. Legal Effect

This agreement constitutes a binding legal agreement between the Partners. Any dispute arising from this agreement will be resolved through arbitration in [CITY, STATE].

8. Governing Law

This agreement will be governed by and construed in accordance with the laws of the State of [STATE].

9. Execution

This agreement may be executed in counterparts, each of which will be deemed an original, and all of which together will be deemed one and the same instrument.

IN WITNESS WHEREOF, the Partners have executed this agreement as of the date first above written.

[PARTNER 1 NAME] [PARTNER 2 NAME]

[PARTNER 1 SIGNATURE] [PARTNER 2 SIGNATURE]

[DATE] [DATE]

In conclusion, a well-drafted dissolution of partnership agreement is essential when business partners decide to end their partnership. It can help avoid disputes and ensure that the process is fair, equitable and legal. Partners should consider seeking the advice of an attorney experienced in partnership agreements to help draft a customized agreement that meets their specific needs.