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If you withdraw from a general partnership, pay attention to personal liability: this continues after withdrawal for debts incurred before your departure. A good general partnership agreement (with continuation, asset, and takeover clauses) and a tailored general partnership withdrawal agreement regulate how you separate and limit the risks.
A general partnership (VOF) is an accessible form of collaboration, but it has disadvantages — particularly the personal liability that continues to have an effect even after withdrawal. With the right contracts, you can prevent many problems.
Think about withdrawal and continuation in advance
In a number of cases, a general partnership is automatically dissolved, for example upon the death or voluntary withdrawal of a partner. This is by no means always desirable. You can deviate from this contractually in advance, which is why a good general partnership agreement indispensable.
In the general partnership agreement, you stipulate, among other things:
- Continuation clause — the remaining partners may continue the general partnership after the withdrawal of a partner.
- Asset clauses — what happens to the assets upon withdrawal, for example, whether a withdrawing partner must permanently make a machine available.
- Takeover clauses, non-compete clauses , and more.
Withdrawal is therefore often already extensively regulated in a good contract — review it carefully beforehand.
Pay attention to personal liability after withdrawal
A significant disadvantage of a general partnership is the personal liability of the partners. As a rule, this continues after withdrawal, but only for debts incurred before the withdrawal. This applies regardless of how you withdraw: by unilateral termination, dissolution by the court, expulsion (based on an expulsion clause), or based on another clause. Personal liability only lapses under certain objective circumstances, such as death.
Regulate the consequences in a general partnership exit agreement
You can deviate from the standard consequences with a general partnership withdrawal agreement. In this agreement, you determine what the withdrawal means for the assets and liabilities of the general partnership, as well as for liability. The remaining partners are often willing to cooperate, but then request additional guarantees, such as a confidentiality and non-compete clause. Such an agreement is always custom-made.
Frequently Asked Questions
Do I remain liable after withdrawing from a general partnership?
Yes, in principle you remain personally liable for debts incurred before your withdrawal. You do not, however, remain liable for new debts of the continued general partnership.
Is a general partnership automatically dissolved if I withdraw?
In principle yes, unless the general partnership agreement contains a continuation clause. With that, the other partners can simply continue the business.
Do I need a separate exit agreement?
That is highly recommended. A general partnership exit agreement sets out the agreements regarding assets, debts, and liability and prevents future disputes.
Assistance with withdrawing from a general partnership
The legal experts at MKB Juristen draft your general partnership agreement or partnership exit agreement and ensure that all terms are correct. Schedule an intake interview . Do you have a conflict with your co-partners? register your case with us.
