What are the rules for winding up a partnership?

Winding up a partnership in Virginia can be done through voluntary or involuntary dissolution. Voluntary dissolution of a partnership occurs when all partners agree to dissolve the partnership. The partners should have a written agreement to dissolve, including information on how to distribute partnership assets and how the remaining debts will be handled. This agreement should be filed with the Virginia State Corporation Commission. Involuntary dissolution of a partnership can happen when a partner breaches the partnership agreement or when a lawsuit is filed against the partnership. Virginia state law requires that the Master Commissioner of the circuit court shall have the power to dissolve the partnership. Following involuntary dissolution, the court will appoint a receiver to investigate the partnership’s assets and liabilities. Once the receiver files their report, the court will issue a decree ordering the partnership to be dissolved. In either case, it is important for the partners to file a dissolution with the State Corporation Commission so that the partnership will not continue to be liable for any debts or actions after dissolution. The Commission will also require that taxes and other liabilities be paid before officially ending the partnership.

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What are the rules for winding up a partnership?

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