11+ Dissolution Agreement Examples – PDF, Word


It is undeniable that the goal of every business entity is to make profit as it is needed to run any system. In order for the business to keep moving forward, the money needs to be generated. With the use of marketing plans and strategies, businesses thrive hard to survive.

However, there are times that plans and strategies just do not work. Furthermore, with partnership agreements that are made under strict rules and regulations, it only holds well when the parties keep adhering the rules. The partnership dissolution agreement also comes into play when partner parties are not able to continue the business or the term of the contract expires or is governed by the law.

Dissolution of Subsidiary Agreement Example

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Dissolution of Subsidiary Agreement

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Basic Partnership Dissolution Agreement Example

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Signing a dissolution agreement will not immediately terminate the entity; it will still continue until the entity has gone through the process of dissolution and winding up of business. In a dissolution agreement, things relating to the timelines, responsibilities, as well as roles of the concerned parties must be cleared to make it easier to end a business relationship. You may also see business agreement examples.

Having a hard time creating a dissolution agreement? In this article, we provide you several dissolution agreement examples and templates that can help you in your dissolution process. Check them out below.

Business Partnership Dissolution Agreement Example

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What Is Dissolution?

Also called cancellation of agreement or termination of partnership, dissolution is the commonly used term for the last stage of liquidation, the first of the two stages in the termination of a partnership; the second stage is the winding up of business. You may also like letter of agreement examples.

Moreover, this may also refer to the termination of a contract or other legal relationship such as a divorce of a marriage.

Furthermore, this term may also be the term for the legal process by which an adoption is reversed. It’s more commonly referred to as disruptions albeit this applies only to those that are not legally complete at the time of termination. You may also check out management agreement examples & samples.

Lastly, in international law, dissolution is when a state has broken up into several entities, and the state no longer has power over those entities just like in the case of the former USSR dissolving into different republics.

Terms and Conditions Included in a Dissolution Agreement

In a dissolution agreement, you must not forget to include the important details necessary to have clear terms and conditions with regard to your dissolution. As a minimum, the items needed to be included in a dissolution agreement are as follows. You may also see service agreement examples.

There might be other important information for other types of businesses, but the list below are the things that you must not miss to include in your dissolution agreement.

  • Effective date of agreement
  • Parties to the agreement
  • Liquidating partner
  • The term of the partnership
  • Rights and responsibilities of liquidating partner
  • Management of the liquidation
  • Selling partner
  • Fees payable
  • Inventory
  • Agreed purchase price
  • Records
  • General Statement of account
  • Allocation and distribution of assets
  • Allocation of liabilities and debts
  • General release from action
  • Tax obligations
  • Procedure to deal with disputes
  • Indemnification of the liquidating partner
  • Governing law
  • Severability
  • Headings
  • Amendments

Clear Dissolution Agreement Example

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Comprehensive Dissolution Agreement Example

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Concise Dissolution Agreement Example

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Free Dissolution Agreement Example

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Dissolution of a Firm

If a partnership is dissolved, that does not mean that the firm is dissolved, but dissolution of a firm implies dissolution of the partnership. Dissolution of the firm can be done in many ways whether is it voluntary, through the operation of law, or by the happening of certain circumstances. A firm will be dissolved on any one of the following ways:

1. Dissolution by Agreement

A firm may be dissolved at any time by the simple agreement of all partners. When a firm perceives that it can no longer operate a profitable business in the future and they want to discontinue the operation of the business, it can be dissolved by the mutual consent or agreement of all partners.

2. Compulsory Dissolution

There are also cases when a firm is compulsorily dissolved by operation of law. This is the case when all the partners except one become insolvent or when all the partners become insolvent. Alternatively, compulsory dissolution may also take place when the business operations become illegal or when the number of partners exceeds twenty, in case of ordinary business, or ten, in case of banking. You may also see purchase agreement examples.

3. Dissolution on the Happening of Certain Contingencies

There are also certain circumstances and contingencies that can dissolve the business entity such as the following:

  • The expiration of the business term
  • The completion of the venture for which the partnership was constituted
  • The death of any partner
  • The insolvency of a partner

4. Dissolution by Notice of Partnership at Will

A partner may also give notice in writing to all other partners of his intention to dissolve the firm, especially when a partnership is at will. In effect, the entity will be dissolved upon the commercial agreement of the majority of the partners.

5. Dissolution by the Court

There are cases when the court is empowered to order the dissolution of a firm. These cases are as follows:

  • When a partner becomes insane or has an unsound mind.
  • When a partner becomes incapable of performing his duties permanently due to mental or physical incapabilities. You may also like simple agreement letter examples.
  • When a partner has been proven guilty of a misconduct which can adversely affect the business.
  • When it is no longer possible for the other partners to carry on partnership with a certain partner who is conducting in a different manner.
  • When a partner transfers his interest to a third party.
  • When the business is already operating at a loss, therefore defeating its goal
  • When it appears that the dissolution is just and equitable in cases where there is a continued quarrel among the partners, deadlock in the management, refusal to attend matters of business, and many others. You may also check out business agreement letter examples.

Partnership Dissolution Agreement Sample Wordings

THIS AGREEMENT created with the Effective Date of Agreement between Partner 1, of
Address of Partner 1 and Name of Partner 2, of Address of Partner 2

WHEREAS the parties hereto (hereby called “Partners”) entered into a partnership with one another on Date of Establishment of Partnership (the “Partnership”) to carry on the business of Brief Description of Nature of Partnership Business from premises at Premises of Partnership under the name Partnership Name; You may also see sales agreement samples.

AND WHEREAS the Partners now wish to dissolve the Partnership;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the mutual agreements contained in this agreement and subject to the terms and conditions set out in this document, the parties hereto agree as follows:

1. The Partners agree to dissolve the Partnership effective the Dissolution Date.

2. All assets as well as liabilities of the Partnership will be distributed to the Partners pro rata in accordance with their respective interests in the Partnership effective the Dissolution Date. You may also like contractor agreement examples.

3. Each Partner hereby indemnifies and saves harmless the other Partner against any claims, actions, losses, demands, and damages suffered by such Partners resulting from the failure of the Partner to pay and discharge any portion of any Partnership liability. You may also check out agreement letter for payment examples.

4. The Partners hereby forever discharge and release one another from any claims, actions, losses, demands, and damages arising from or relating to the Partnership, except any claims, demands, actions, losses and damages arising from or resulting from the terms and conditions of this basic agreement.

5. This Agreement shall ensure to the benefit of and be binding upon the respective heirs, executors, administrators and assigns of each of the parties hereto.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date written above.

Witness, Name of Partner 1

Witness, Name of Partner 2

6. Release. Except as expressly otherwise provided in this Agreement, the Vendor and the Purchaser hereby forever discharge and release one another from all debts, liabilities, claims, and obligations in any way as regards the Partnership, including but not limited to the partnership agreement entered into between the Vendor and the Purchaser, if any, effective the Dissolution Date. You might be interested in professional services agreement examples.

7. Further Assurances. Each of the parties covenants and agrees that he or she, including his or her heirs, executors, administrators, successors and assigns will sign such further agreements, waivers, assurances, and documents, and otherwise do and perform or cause to be done and performed such further and other acts and things that may be necessary or desirable from time to time in order to give full effect to this standard agreement.

8. Successors and Assigns. This Agreement shall ensure to the benefit of and be binding upon heirs, successors, executors, and assigns of each of the parties.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date written above.

Witness, Name of Partner 1

Witness, Name of Partner 2

General Partnership Dissolution Agreement Example

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Legalzoom Dissolution Agreement Example

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Partnership Dissolution Agreement Example

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State of Connecticut Dissolution Agreement Example

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Sum Up

Business entities may have operated for a long time, but there are certain instances in which dissolution is the best thing that a business must do whether it is voluntary or it is mandated by law. The firm may be dissolved in the following cases: dissolution by common agreement, compulsory dissolution, dissolution on the happening of certain contingencies, dissolution by notice of partnership at will, and dissolution by the court.

In order to complete the process of dissolution and, subsequently, the winding up of business, a dissolution agreement must be signed by the partners agreeing the termination of the business operations, settling the liabilities, and liquidating the assets and other sample agreements related to the closing of the business.

The terms and conditions in a dissolution agreement include but is not limited to the following: effective date of agreement, parties to the agreement, liquidating partner, the term of the partnership, rights and responsibilities of liquidating partner, management of the liquidation, selling partner, fees payable, inventory, agreed purchase price, records, general statement of account, allocation and distribution of assets, allocation of liabilities and debts, general release from action, tax obligations, procedure to deal with disputes, indemnification of the liquidating partner, governing law, severability, headings, and amendments.

In creating your own dissolution agreement, just make sure that your dissolution agreement is clear, concise, and comprehensible among the parties, or better check out the above examples of dissolution agreement.

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