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If you're a partner in a business partnership and you wish to withdraw from the arrangement, you'll need to formally notify the other partners of your intentions. To do that, you'll need to complete a notice of withdrawal from partnership.
Keep reading to find out what this notice is, what information it needs to contain and where to source free templates and further guidance online.
What is a notice of withdrawal from partnership?
A notice of withdrawal from partnership is a document used to announce a partner's withdrawal from a business partnership. It's designed to ensure that the outgoing partner will no longer be liable for future debts of the partnership, and to effectively communicate your intentions to other partners.
Download this template at Lawpath
When should I use a notice of withdrawal from partnership?
You can use a notice of withdrawal from partnership when you wish to withdraw from a business partnership.
However, this document should only be used when the partnership will continue to operate after the relevant partner withdraws. If the partnership will cease operation, you'll need to look into the legal process of dissolving the partnership.
Access customisable notice of withdrawal from partnership templates online
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Notice of withdrawal from partnership vs notice of retirement from partnership
A notice of retirement from partnership is simply another term for a notice of withdrawal from partnership. These two documents perform the same purpose of notifying the remaining partners of your wish to withdraw from a business partnership.
What does a notice of withdrawal from partnership include?
A notice of withdrawal from partnership typically includes:
- The name and address of the partner who wishes to withdraw
- The name of the business and the date when the partnership was formed
- The jurisdiction in which the partnership is based
- The date from which the withdrawal will be effective and the departee will no longer be considered a partner
- The terms of the withdrawal as outlined in the partnership agreement — for example, whether the remaining partners must make a buyout offer to the withdrawing partner within a certain period of time.
The document should then be sent to all remaining partners.
How effective is a notice of withdrawal from partnership?
A notice of withdrawal from partnership is a simple and effective way to retire or withdraw from a partnership. However, what happens when the document is issued, plus what information the notice must contain, may differ depending on the terms set out in the partnership agreement about the voluntary withdrawal of a partner.
The remaining partners will need to update their partnership details with ASIC within 28 days — you can add or remove business name partners via ASIC Connect — and update relevant details with the Australian Taxation Office (ATO).
If the partnership is to continue as a reconstituted partnership, it will not need a new Tax File Number (TFN) or Australian Business Number (ABN). However, if the existing partnership is dissolved and a new partnership created, a new TFN and ABN will be required.
Do I need a lawyer for a notice of withdrawal from partnership?
Not necessarily. However, it's essential to ensure that you satisfy all your legal and tax obligations upon exiting the partnership, so you may benefit from legal advice.
For example, what do you need to do to satisfy the terms of a partnership agreement? If there's no partnership agreement in place, how will partnership law in your state or territory affect you if the partnership is to be dissolved?
The exact process for ending a partnership will also differ depending on whether it is a limited partnership or not, so it's important to be aware of all requirements you must fulfil. With this in mind, it's a good idea to seek advice from an experienced business or commercial lawyer.
How do I write a notice of withdrawal from partnership?
There are a couple of options available when drafting a notice of withdrawal from partnership. The first is to use a free online template to create a document tailored to your needs. You can do this by providing some basic information about yourself, the partnership and when you wish to withdraw. However, you'll need to ensure that any template you choose is sufficient to satisfy all legal requirements.
The second option is to pay a business or commercial lawyer to create a notice of withdrawal from partnership on your behalf. This obviously means dealing with an additional cost, but it'll also ensure that your notice fulfils all your obligations under law and your partnership agreement so that you are no longer considered a business partner.
More details on where to find free legal documents and templates
A host of websites offer access to free notice of withdrawal from partnership templates online. Available options may include:
- Lawpath. You can fill out a Lawpath notice of withdrawal by filling in your details online. However, you'll need to register for a free account first.
- LawDepot. LawDepot allows you to create a notice for free online in under 10 minutes. You'll need to complete a questionnaire to fill out the form with all the relevant details.
- Wonder.Legal. Wonder.Legal offers a notice of retirement from partnership you can complete online and then receive in Word and PDF format.
- LegalVision. LegalVision provides a free deed of retirement from partnership. Once you fill in the required information, the document will be sent to the email address you provide.
- LegalRocket. This site offers a deed of retirement from partnership template that you can use for free, but you can also pay to consult a business lawyer and have them customise the document to suit your needs.
Make sure any online template you choose is appropriate for your needs and satisfies the procedures set out in the partnership agreement or relevant partnership law in your state or territory.Back to top
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