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Drafting an agreement for the withdrawal of partners in a general partnership

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Mr. Jaime Boogaers
Corporate Law
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About us

Our expertise

Our lawyers and in-house counsel specialize in drafting, reviewing, and amending legal documents and contracts. We look not only at the legal text but also at how you use the document in practice.

Custom solutions for your industry

Every business operates differently. That is why we take your industry, customers, working methods, and specific risks into account.

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The founders of MKB Juristen

Our organization consists of several small teams working within various legal fields. Each legal field has its own senior in-house counsel and/or lawyers.

Denian Wielhouwer

Corporate lawyer in corporate law & business expert

Denian Wielhouwer

Annelore Hendriks

Corporate lawyer, corporate law, administrative law

Annelore Hendriks

Ilja van Driel

Corporate law attorney, employment law

Ilja van Driel

Jaime Boogaers

Corporate law, ICT & privacy law, energy law attorney

Jaime Boogaers
Custom choices

Which choices determine the content?

Before you draft the agreement, a few key questions determine what the settlement will look like.

Choice or question Why this matters legally
Will the general partnership be continued or dissolved? In the event of continuation, the remaining partners assume the share; in the event of dissolution, liquidation and distribution of the assets follow.
How is the share of the exiting shareholder valued? Determines whether to base the calculation on the book value, the current value, or a method agreed upon in advance in the partnership agreement.
Does the departing employee receive compensation as a lump sum or in installments? Affects the liquidity of the company and the collateral required by the withdrawing party.
Do non-compete and non-solicitation clauses remain valid? Determines whether the departing party may take customers with them or start a similar business.
How is liability defined? Establishes who is liable for existing and future debts and which indemnities apply.
Clauses and provisions

What elements should be included in a general partnership withdrawal agreement?

A partner withdrawal agreement regulates the financial settlement, the transfer of shares, and the termination of liability. The following components are typically included.

Provision Relevant to Legal point of attention
Parties and general partnership details Always Lists the withdrawing partner, the remaining partners, and the general partnership with Chamber of Commerce number.
Date of withdrawal Always Establishes the exact date on which the partner withdraws and his rights and obligations transfer.
Buyout price and valuation In the event of compensation to the departing employee Describes the amount, the valuation method of the share, and the payment term.
Acquisition of capital account and share Always Regulates how the share in the enterprise and the capital account are transferred to the remaining partners.
Termination of joint and several liability Always Determines from which moment the withdrawing party is no longer liable and how this is processed at the Chamber of Commerce.
Indemnification Recommended The remaining partners indemnify the withdrawing partner against debts arising after the withdrawal, and conversely for the past.
Continuation of the business In the case of a continuous general partnership Confirms that the remaining partners will continue the general partnership and arranges for the use of the name and assets.
Non-competition and confidentiality With sensitive knowledge or customers Protects customer relationships and sensitive business information after departure.
Use in practice

How do you use this document correctly?

The document is only effective if all partners sign it and the withdrawal is also formally processed.

Situation What should you do? Point of attention
For signature Check the existing partnership agreement for exit rules The general partnership agreement may already prescribe a method for valuation or continuation that you must follow.
Upon signing Have all partners and the withdrawing partner sign A withdrawal affects all partners; without everyone's signature, the settlement is not binding.
Immediately after leaving Report the change to the Chamber of Commerce Withdrawal limits the liability of the withdrawing member towards third parties.
After settlement Keep the agreement and proof of payment You can demonstrate later that the buyout has been paid and the liability has been terminated correctly.
Common mistakes

Common mistakes

When a partner leaves, things often go wrong on points that only result in costs or conflicts later on.

Wrong Consequence Better approach
No written record of the buyout amount Subsequent discussion regarding how much and when payment is due Explicitly specify the amount, method, and payment term in the agreement.
Liability not clearly defined The withdrawing party remains liable for new debts, or the remaining parties for old ones Include a clear indemnity and determine the reference date for liability.
Withdrawal not reported to the Chamber of Commerce The withdrawing party remains jointly and severally liable towards third parties Deregister the partner with the Chamber of Commerce immediately after withdrawal.
Forgot non-compete and non-solicitation clauses The departing employee takes customers or staff with them Agree in advance whether and for how long a non-compete and non-solicitation clause applies.
Continuation of name and assets not arranged Uncertainty regarding who may use the trade name and assets Confirm in the agreement that the remaining partners continue the business with name and assets.
Risk profile

What is your situation and what do you pay attention to?

The approach of the agreement varies significantly depending on the situation. Below are the most common.

Risk profile Example Focus in the document
Partner steps down by mutual agreement The partner leaves voluntarily and the general partnership is continued Clear buyout amount, indemnification, and correct deregistration with the Chamber of Commerce.
Conflict between partners The departure follows disagreement or a breach of trust Comprehensive confidentiality, non-competition, and a fixed cut-off date for liability.
Retirement due to retirement or illness The partner is stepping down for personal reasons Phased payment and agreements regarding ongoing obligations and transfer of tasks.
Acquisition by new partner The place of the departing partner is taken by a new partner Combine the withdrawal agreement with an entry arrangement and an updated general partnership agreement.
Additional documents

When is this document not enough?

Sometimes your situation calls for an additional or different document. In these cases, one of the following documents will be of further assistance.

Situation Supplementary document Why
Situation Related document Explanation
The entire collaboration must be formalized Cooperation Agreement Use this if the remaining partners wish to fully revise or formalize their mutual agreements.
You want to permanently protect business-sensitive information Confidentiality Agreement Stipulate that the withdrawing partner may not use or share confidential knowledge and client data.
The departing party will manage or advise the company Management Agreement Arrange any continued involvement at management level separately and clearly.
Explanation of this document

Drafting an agreement for the withdrawal of partners in a general partnership: why?

Not every entrepreneur knows exactly what a general partnership withdrawal agreement entails, when you need one, and which risks it must cover. Therefore, we explain below what this document entails, what you should look out for, and why customized legal solutions are important.

What is an agreement for the withdrawal of partners from a general partnership?
An agreement for the withdrawal of partners from a general partnership (VOF) is the agreement whereby one or more partners leave the general partnership, transfer their share in the partnership assets to the remaining partners, and arrangements are made regarding the distribution of mutual rights and obligations, liability for existing debts, and the continuation of the VOF by the remaining partners. The withdrawal agreement regulates in a single document what a VOF withdrawal agreement regulates for a single partner, but for situations where multiple partners withdraw simultaneously or in phases — such as in a family business where the founding generation retires and the next generation continues the VOF, or during a restructuring where the VOF structure is converted into a private limited company (BV). Our lawyers will draft a partner withdrawal agreement for you that correctly calculates the withdrawal compensation for each withdrawing partner, watertight regulates the distribution of liability, correctly addresses the Carlande judgment upon the entry of new partners, and legally safeguards the continuity of the VOF.
How do you arrange the exit compensation when multiple partners are withdrawing?
If multiple partners withdraw simultaneously, calculating the withdrawal compensation per partner is a precise exercise. Each withdrawing partner is entitled to compensation reflecting their economic share in the general partnership: their capital account, their share in the hidden reserves, and their share in the goodwill of the company. If the withdrawing partners do not all hold the same capital share, profit share, or goodwill share, the distribution per partner must be calculated separately based on the general partnership agreement. In the case of a phased withdrawal—partners withdrawing at different times—the change in value of the company between the withdrawal moments must also be taken into account. Your agreement must contain a clear valuation methodology accepted by all involved partners. Our lawyers advise on the valuation and tax implications per partner.
What are the consequences of withdrawal for the liability of the withdrawing partners?
Pursuant to Article 18 of the Dutch Commercial Code (WvK), partners in a general partnership (VOF) are jointly and severally liable for all debts of the VOF. This liability continues after withdrawal for all debts incurred prior to the moment of withdrawal, unless individual creditors consent to release from liability. This is one of the most underestimated risks associated with VOF withdrawal: an entrepreneur leaving the VOF can still be held liable years later for debts incurred during the period in which he was a partner. The withdrawal agreement must oblige the remaining partners to fully indemnify the withdrawing partners against all claims from creditors for debts incurred prior to the withdrawal date. Additionally, the VOF registration with the Chamber of Commerce (KvK) must be amended immediately, and existing creditors must be informed of the withdrawal. Our lawyers draft the indemnification clause and oversee the Chamber of Commerce amendment.
How do you arrange the continuity of the general partnership after withdrawal?
If multiple partners withdraw and the general partnership is continued by one or a few partners, the agreement must stipulate the continuity arrangement . Who are the continuing partners and on what basis do they continue the general partnership? Are new partners being recruited and, if so, how are the Carlande liability risks managed? How are the assets, contracts, licenses, and client relationships—some of which are in the names of the withdrawing partners—transferred to the continuing partners? And how is the trade name treated if it is also linked to the identity of the withdrawing partners? Your agreement must explicitly address each of these continuity issues. Our lawyers draft a continuity arrangement that keeps the general partnership operational during and after the transition.
How does it work at MKBjuristen?
Following an intake regarding the partnership structure, the partners to withdraw, and the manner of continuation, our lawyers draft an agreement for the withdrawal of partners from a general partnership (VOF) that correctly calculates the withdrawal compensation per partner, watertightly arranges the distribution of liability, correctly formulates the indemnification of the withdrawing partners, and legally safeguards the continuity of the VOF. We also assist with the Chamber of Commerce (KvK) changes and advise on the tax consequences of the withdrawal for each involved partner.
Are you unsure whether your document is legally correct? We would be happy to assess the sensible course of action: drafting, reviewing, or amending.
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A legal document only has value if it suits your practice. That is why we look not only at the text, but also at how you use the document in your business.

Common mistakes with legal documents

A legal document often seems simple, but small errors can have major consequences later on. In practice, we see that entrepreneurs run the greatest risk when a document does not align well with their business, agreements, or way of working.

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A legal document only prevents problems if it suits your situation. That is why we look not only at the text, but also at your company, agreements, and risks.

Why is a standard document often not enough?

Because a standard document does not take into account your industry, customers, risks, and specific agreements, important provisions may be missing or not align well with your practice.

Can I create a legal document myself using AI?

AI can assist in creating text, but does not independently assess whether the document is legally appropriate, complete, and usable for your business. Legal review therefore remains important.

When do I need to have my document checked?

Have your document checked if your business has changed, you have new customers or services, you have doubts about existing agreements, or the document has not been updated for a long time.

Will I also receive an explanation about the use of the document?

Yes. We explain how to use the document in practice, what to look out for, and which steps are important to prevent disputes afterwards.

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SME Lawyers at the Chamber of Commerce Source: Chamber of Commerce 2019
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