Dissolving a partnership is a significant decision that will affect both you and your partner/s.

When can a partnership be dissolved?

Generally a partnership can be dissolved if all partners agree to the decision, or in the following circumstances:

• It has become illegal (eg: if a partner can no longer legally own a business);
• A partner gives written notice to the other partners;
• A court order requires the partnership to end;
• The life of the partnership has expired; or
• Any partner dies or becomes bankrupt.

What should we consider once we have agreed to dissolve the partnership?

Once you and your partner/s have agreed to dissolve the partnership you need to consider the following questions:

• Will the business continue to operate once the partnership is dissolved? If so what will be the new business structure?
• If the business will continue to operate, have the new owner/partners applied for a new ABN and GST registration?
• Does the partner selling their interest have CGT to pay?
• If the remaining partner/s will acquire the leaving partner's interest do they need to pay transfer duty ?
• Have you closed the partnership books and completed a final tax return and BAS?
• Have you closed the partnership bank account?
• Are there any other personal or business related accounts and loans that will be affected by the change in business?
• Have the insurance policies been cancelled?
• Have you notified all of the relevant parties? This could include signatories of any ongoing contracts, the bank, customers, the landlord, debtors, creditors, local council, regulators…etc
• Have you updated, canceled or transfered your business name with Australian Securities and Investments Commission?

What's next...

• How do I close a business with employees ?
• What are my tax obligations when I close my business?

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