How to dissolve a general partnership without liquidation?

Winding up as the primary method of dissolving a general partnership

The circumstances to which the legislator attaches the consequence of the dissolution of a general partnership are those specified in Article 58(1) of the Commercial Companies Code, namely:

• the occurrence of events directly specified in the partnership agreement as grounds for the dissolution of the partnership;
• the adoption of a unanimous resolution by all partners;
• the declaration of the company’s bankruptcy;
• the death of a partner or the declaration of their bankruptcy;
• termination of the partnership agreement by a partner or a partner’s creditor;
• a final court ruling.

In Article 67(1) of the Commercial Companies Code, the legislator has specified that in the cases listed above, the company must be wound up, unless the shareholders have agreed on another method of terminating the company’s operations.

Liquidation proceedings involve taking practical and legal steps aimed at realising the company’s assets. To this end, the liquidators should wind up the company’s current affairs, collect receivables and fulfil the company’s obligations. This is generally intended to lead to the disposal of the company’s assets.

Dissolution of a general partnership without liquidation proceedings

The partners may agree on rules for bringing the partnership to an end other than through liquidation.

• Amendment of the partnership agreement

The partners’ agreements regarding the manner of terminating the company’s operations may be included in the partnership agreement. However, where the partnership agreement provides for liquidation proceedings as the sole option for dissolving the company, the partnership agreement must first be amended so that the company can subsequently be dissolved without conducting liquidation proceedings.

• Agreement on the manner of winding up the company

The decision to waive liquidation proceedings should be made by the partners agreeing on an alternative method of winding up the general partnership. This alternative method must involve, amongst other things, an agreement on the distribution of assets, the method of satisfying and securing assets, and the rules governing liability for part of the liabilities.

The partners may divide the assets even before the partnership is dissolved. The division may be carried out in any manner. It is important to ensure that the appropriate legal form required by law is observed; for example, a notarial deed is required for the transfer of real estate.

The partners may therefore terminate the general partnership in various ways. As the legislator has not regulated the issue of succession of the general partnership’s rights in the event of other methods of terminating its operations, the partners are obliged to determine the manner and procedure for dissolving the partnership without undergoing liquidation.

Resolution on the dissolution of the partnership and removal of the partnership from the National Court Register

If all the steps outlined above have been completed, the partners may proceed with the dissolution of the partnership. To this end, it is necessary to adopt a unanimous resolution of the partners to dissolve the partnership without undergoing liquidation. Once the grounds for dissolving the general partnership have arisen and a unanimous resolution of the partners to dissolve the partnership without undergoing liquidation proceedings has been adopted, an application must be submitted to the National Court Register (KRS) to have the general partnership definitively struck off the register.

Dissolution of a general partnership without liquidation – summary

The termination of a general partnership’s operations may arise for many reasons. In principle, regardless of the cause, the partners should carry out liquidation proceedings. However, the legislator has provided for the possibility of dissolving the partnership without liquidation, provided that such an option is included in the partnership agreement. In such a situation, the partners may adopt a unanimous resolution on the basis of which it is possible to submit an application to the National Court Register (KRS) for the company to be struck off the register, without the need to carry out liquidation proceedings.

Author

Martyna Dobkowska

Associate

She specializes in civil, commercial and business law. In the corporate and energy department, her activities are mainly based on providing corporate services to companies, reviewing and preparing commercial contracts, drafting litigation and non-litigation pleadings and preparing analyses and legal opinions, particularly in the sphere of business law and energy law. She also has professional experience in administrative and civil proceedings, which she gained in Warsaw law firms. She supports the Firm's…

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