What happens if a partner leaves a general partnership?

If a partner leaves a general partnership, the partnership is in principle dissolved — unless the general partnership agreement contains a continuation clause allowing the remaining partners to continue. The conditions for withdrawal are set out in the general partnership contract, and a good withdrawal agreement is essential, particularly regarding liability for old debts. Below, you can read how withdrawing from a general partnership works and what you should look out for.

What happens if a partner withdraws?

If a partner leaves a general partnership, the partnership ends and the general partnership is, in principle, dissolved and wound up. The partners must then divide or settle the partnership's assets—both assets and liabilities—among themselves. However, the general partnership agreement may contain deviating arrangements, such as a continuation clause allowing the remaining partners to continue the general partnership. Such a clause is also useful if a partner passes away.

When can you withdraw from a general partnership?

The possibility and conditions for withdrawal are set out in the general partnership agreement. It may stipulate:

• when and how to cancel;
• which notice period applies;
• or the general partnership was entered into for a fixed term (meaning early termination is not possible).

If no agreements are included in the general partnership agreement, termination is in principle always possible, provided it is reasonable and fair — the law permits this. Sometimes it is useful to ask the court to terminate the general partnership. Please note: expelling another partner from the general partnership is not possible by law; this is only possible if it has been agreed upon in the general partnership contract. A well-drafted general partnership contract is therefore of great importance.

Points to consider upon leaving

Make clear agreements in a general partnership exit agreement, especially regarding liability. In it, you stipulate, among other things:

• who is responsible for the debts incurred prior to the withdrawal;
• the handling of the withdrawal and any compensation;
• specific provisions such as a confidentiality clause and a non-compete clause.

TODO_VERIFY: Please note that a withdrawing partner generally remains jointly and severally liable for debts incurred during the period in which he was a partner. Mutual agreements apply between the partners but do not automatically bind creditors — have the liability upon withdrawal legally reviewed.

Frequently Asked Questions

Does the general partnership cease to exist if a partner withdraws?

In principle yes, unless the general partnership agreement contains a continuation clause allowing the remaining partners to continue.

Can I withdraw from a general partnership at any time?

If there are no agreements in the general partnership contract, termination is in principle always possible, provided it is reasonable and fair. If the general partnership was entered into for a fixed term, early termination may be limited or excluded.

Can I remove a co-partner from the general partnership?

Not by virtue of the law. That is only possible if it has been expressly agreed upon in the general partnership agreement.

Do I remain liable for old debts after leaving?

In principle, yes, for debts from the period when you were a partner. Mutual agreements between the partners regulate this, but do not automatically bind creditors.

Help with withdrawing from a general partnership?

The withdrawal process in a general partnership is often complex and directly affects your liability. We draft a watertight general partnership agreement or withdrawal agreement, assist with conflicts between partners, and provide tailored legal advice.

View our corporate law or schedule a no-obligation intake consultation.