PARTNERSHIP DISSOLUTION AGREEMENT, A STARTING TEMPLATE
Growing Partners (growingpartners.org)

This is general information, not legal or tax advice. It is for winding up
and ending a partnership or multi-member LLC that is closing down, not for a
buyout where the business continues under the remaining owners (see the
Partner Buyout Agreement template and article on this site for that case).
It is built from the structure of the Uniform Partnership Act (1997), Article
8 (sections 801 through 807), which governs winding up absent a different
agreement; an LLC's winding-up process is similar under most states' LLC
acts but check the state's own statute. Every bracket needs a decision, the
notice-to-creditors and state-filing sections vary significantly by state and
by entity type, and a lawyer and a tax adviser, both licensed in the state of
formation, should read the finished document before anyone signs it, files
anything, or distributes any asset.

DISSOLUTION AND WINDING-UP AGREEMENT OF [PARTNERSHIP/LLC NAME]

This Dissolution and Winding-Up Agreement ("Agreement") is entered into as of
[DATE], by and among the partners or members of [PARTNERSHIP/LLC NAME] (the
"Company"), namely [PARTNER/MEMBER 1 NAME] and [PARTNER/MEMBER 2 NAME] [AND
ADDITIONAL PARTNERS/MEMBERS AS NEEDED] (each a "Partner" and together the
"Partners").

RECITALS
The Partners have agreed to dissolve the Company and wind up its business.
This Agreement records how that winding up will be conducted, how the
Company's assets and liabilities will be allocated, and the releases the
Partners exchange once it is complete.

1. DEFINITIONS
"Dissolution Date" means [DATE], the date on which the Company ceased, or
will cease, to carry on business other than for the purpose of winding up.
"Winding-Up Period" means the period from the Dissolution Date until the
Company's business and affairs are fully wound up under this Agreement.

2. DISSOLUTION
The Company is dissolved effective as of the Dissolution Date. From that
date, the Company shall transact no further business except as appropriate
to wind up its affairs: finishing existing contracts, collecting
receivables, selling or distributing assets, paying or providing for
liabilities, and distributing any remainder to the Partners under Section 8.

3. CONDUCT OF THE WINDING UP
[OPTION A: Each Partner who has not wrongfully caused the dissolution may
participate in winding up the Company's business.] [OPTION B: [NAMED
PARTNER(S)] shall conduct the winding up on behalf of all Partners, with
authority to preserve Company property for a reasonable time, prosecute and
defend claims, settle and close the business, dispose of and transfer
Company property, discharge Company liabilities, and distribute assets under
Section 8.] A person conducting the winding up shall provide the other
Partners with [FREQUENCY, E.G. MONTHLY] written updates on its progress.

4. NOTICE TO CREDITORS AND CUSTOMERS
Within [NUMBER] days of the Dissolution Date, the person conducting the
winding up shall send written notice of the dissolution to every known
creditor and to customers with an open order, account or contract, stating
the Dissolution Date and, where the state's law allows a notice to shorten
the time a claim may later be brought, the deadline and manner for
submitting a claim. [WHERE STATE LAW PROVIDES FOR IT: The Company shall also
publish notice of the dissolution in [A NEWSPAPER OF GENERAL CIRCULATION
WHERE THE COMPANY DOES BUSINESS, OR AS THE STATE'S DISSOLUTION STATUTE
PROVIDES], to bar an unknown claim not brought within [NUMBER] DAYS OR MONTHS
AFTER PUBLICATION. CONFIRM WHETHER THE STATE PERMITS THIS BAR AND WHAT PERIOD
ITS STATUTE SETS BEFORE RELYING ON THIS CLAUSE.] A statement of dissolution filed
with the [STATE] Secretary of State under the state's partnership or LLC act
limits a Partner's authority to bind the Company to a person who has notice
of it, which for a person without actual notice is typically 90 days after
filing; confirm the state's own rule.

5. INVENTORY AND FINAL ACCOUNTING
Within [NUMBER] days of the Dissolution Date, the person conducting the
winding up shall prepare, and deliver to every Partner, a statement of the
Company's assets and liabilities as of that date and each Partner's Capital
Account balance calculated from the Company's books.

6. DISPOSITION OF ASSETS
The Company's assets shall be [SOLD AND THE NET PROCEEDS APPLIED UNDER
SECTION 7 / DISTRIBUTED IN KIND AS FOLLOWS: [LIST SPECIFIC ASSETS AND WHICH
PARTNER RECEIVES EACH, WITH AN AGREED VALUE CREDITED AGAINST THAT PARTNER'S
SHARE UNDER SECTION 7] / A COMBINATION OF BOTH, AS SET OUT ON EXHIBIT A]. A
disagreement over the value of an asset distributed in kind is resolved by
[AN APPRAISAL PROCESS: EACH SIDE SELECTS AN APPRAISER WITHIN [NUMBER] DAYS,
AND THE TWO SELECT A THIRD WITHIN [NUMBER] FURTHER DAYS; THE AVERAGE OF THE
TWO CLOSEST VALUATIONS CONTROLS].

7. ASSUMPTION OF CONTRACTS AND LEASES
[LIST ANY ONGOING CONTRACT, LEASE OR LICENSE THE COMPANY HOLDS AND WHICH
PARTNER, IF ANY, ASSUMES IT GOING FORWARD, WITH THAT PARTNER INDEMNIFYING THE
OTHERS FOR ANY OBLIGATION UNDER IT ARISING AFTER THE ASSUMPTION DATE.] A
Partner who assumes a Company lease or contract under this Section shall use
reasonable efforts to obtain the landlord's or counterparty's consent to a
release of the other Partners from it.

8. PAYMENT OF LIABILITIES AND PRIORITY OF DISTRIBUTIONS
The Company's assets, including any contribution required from a Partner
with a negative Capital Account under Section 9, shall be applied in the
following order: first, to outside creditors, including a Partner who is a
creditor of the Company; second, to any surplus paid in cash to the Partners
in accordance with their Capital Account balances after all profit and loss
on the liquidation described in Section 6 has been credited and charged to
those accounts.

9. CONTRIBUTION FOR A DEFICIT
A Partner whose Capital Account, after the allocation in Section 8, shows a
deficit shall contribute to the Company an amount equal to that deficit,
except to the extent the deficit is attributable to an obligation for which
that Partner is not personally liable under the partnership agreement or
applicable law. If a Partner fails to contribute the full amount required,
the other Partners shall contribute the shortfall in the proportion they
share losses under the partnership or operating agreement, and a Partner who
contributes more than that Partner's own share may recover the excess from
the Partner who failed to contribute.

10. EMPLOYEES
The person conducting the winding up shall pay all final wages and accrued
and unused paid time off owed to Company employees by the deadline the
state's final-pay law requires, and shall determine whether the Worker
Adjustment and Retraining Notification Act or a state equivalent applies to
the closing, which can require advance written notice where the Company has
[NUMBER OR MORE] employees; confirm the current federal and state thresholds
before the Dissolution Date if the Company has employees.

11. STATE FILINGS
The person conducting the winding up shall file a certificate or statement of
dissolution (for a partnership) or a certificate of cancellation (for an
LLC) with the [STATE] Secretary of State, and shall cancel any assumed name
or "doing business as" registration, business license, and permit the
Company no longer needs, in [STATE] and in every other state where the
Company was registered to do business.

12. TAX MATTERS
The person conducting the winding up shall cause the Company to file a final
federal partnership return (Form 1065) marked as a final return, issue each
Partner a final Schedule K-1 marked as final, file final state and local tax
returns, close the Company's state sales tax and payroll tax accounts, and
notify the Internal Revenue Service in writing that the Company's Employer
Identification Number account should be closed. This Agreement is not tax
advice; each Partner should consult that Partner's own tax adviser about the
tax effect of the liquidating distribution described in Section 8.

13. MUTUAL RELEASES
Effective on completion of the winding up described in this Agreement, each
Partner releases every other Partner and the Company from every claim
arising out of or relating to the partnership and its business, known or
unknown, through the Dissolution Date, except for: (a) claims arising from
fraud or willful misconduct; and (b) each Partner's obligations under this
Agreement.

14. RECORDS RETENTION
[NAMED PARTNER] shall retain the Company's books and records for [NUMBER]
years after the Dissolution Date and shall give every other Partner
reasonable access to them on request, principally for tax purposes.

15. REPRESENTATIONS
Each Partner represents that, to that Partner's knowledge, the statement
delivered under Section 5 reflects all of the Company's material liabilities
as of the Dissolution Date, other than liabilities incurred in the ordinary
course of winding up after that date.

16. DISPUTE RESOLUTION
A dispute over the value of an asset under Section 6, other than an
appraisal process agreed there, or over any other term of this Agreement,
shall be submitted to mediation under the rules of [PROVIDER] before either
side may file suit, [OPTIONAL: and, if mediation does not resolve it within
[NUMBER] days, to binding arbitration under the rules of [PROVIDER]].

17. MISCELLANEOUS
This Agreement binds and benefits the Partners' heirs, personal
representatives and permitted assigns. It may be amended only in writing
signed by all Partners. It is governed by the laws of the State of [STATE].

IN WITNESS WHEREOF, the Partners have signed this Agreement as of the date
first written above.

___________________________          ___________________________
[PARTNER 1 NAME]                      [PARTNER 2 NAME]
Date: ______________                  Date: ______________