A partnership dissolution agreement is the document partners sign to end the partnership on terms they have agreed rather than terms a court sets: what is owed, what is sold, what each takes and when it is over. Most partnerships would rather never sign it, and the way to avoid it is a buy-sell agreement template signed at the start, which prices one partner's exit, by death, disability, retirement or a falling-out, before it happens. The buy sell agreement template, hyphen or not, is the same document. The silent partner agreement template sits beside both: the partner who puts in capital and takes a share but does not run the business, with the rights and limits that implies. This page walks the three from the partner's side and works the exit figures with the free partnership worksheet on this site.
Dissolution: ending it on paper
The agreement names the dissolution date, who winds up the business, how the assets are sold or divided, how the debts are paid and in what order, how the remaining capital is returned in the partners' shares, and what each partner may and may not do afterwards, the name, the customers, the non-compete. The shares are the partnership agreement's shares, and on the worked example on this site a $100,000 capital base held 60%, 30% and 10% returns in those shares after the debts. A dissolution agreement without a winding-up order is a second dispute.
Buy-sell: pricing the exit before it happens
A buy-sell agreement template names the triggers, death, disability, retirement, a partner's wish to leave, a breach, and for each the obligation or the option of the others to buy the share, the valuation method and the payment terms, often over years, sometimes funded by insurance. On the worked example, the 30% partner's share at a $400,000 valuation is $120,000, and the agreement says whether that is paid at once or over a term. The valuation method is the clause to write carefully; the worksheet takes the valuation as an input and publishes no method.
The silent partner, and the record
A silent partner agreement template states the capital contributed, the share of profit, the limits on the silent partner's authority, no management, no binding the partnership, and the information they receive. Silence has a legal edge: a general partner, silent or not, may be liable for the partnership's debts, which is why many silent partners hold their stake through a limited partnership or a company instead. Termslane Pro keeps the partnership, the buy-sell and the silent partner agreement against the partners with the shares, the valuation terms and the versions, and the IRS guidance cited below is the reference for what dissolution means for tax.
Questions people ask about partnership dissolution agreement
What is a partnership dissolution agreement?
The document partners sign to end the partnership on agreed terms: the date, who winds up, how assets are sold or divided, how debts are paid, how capital is returned in the partners' shares and what each partner may do afterwards.
What does a buy-sell agreement do?
It prices a partner's exit in advance: the triggers, the others' obligation or option to buy the share, the valuation method and the payment terms. The worksheet works the buyout figure from the valuation you enter.
Is a silent partner liable for the partnership's debts?
A silent partner who is a general partner may be; that is why silent stakes are often held through a limited partnership or a company. The agreement should say what the silent partner may not do, and the structure should match.