Dissolving a Partnership in Rhode Island and Massachusetts

by | Mar 28, 2024

The journey of a partnership, like any good story, can have a satisfying conclusion, not just a dramatic fall. But winding down a business venture, especially a partnership, can feel like deciphering an ancient riddle in a dimly lit room. Fear not, intrepid entrepreneurs, for we have assembled a legal torch to guide you through the intricacies of dissolving a partnership in Rhode Island and Massachusetts.

Understanding the Types of Partnerships


General Partnerships:

Each partner shares equal control, unlimited liability for debts, and profit/loss allocation.


Limited Liability Partnerships (LLPs):

Similar to general partnerships, but partners enjoy limited liability for debts incurred outside their scope of authority.


Limited Partnerships (LPs):

Have at least one general partner (unlimited liability) and one limited partner (limited liability).

Initiation of Dissolution

The path to dissolution can have various entry points. Some triggers are involuntary, like a partner’s death, withdrawal, or bankruptcy. Others are driven by mutual agreement, perhaps due to irreconcilable differences or reaching the partnership’s natural lifespan. In both states, a written agreement of dissolution is recommended for clarity and protection.


Rhode Island:

The Uniform Partnership Act (UPA) governs general and limited partnerships. Dissolution generally occurs upon a partner’s withdrawal, expulsion, or death. A written notice may be required for withdrawal, and expulsion needs a valid reason with proper notice.



The UPA also applies, but additional statutes govern LPs. Dissolution can occur through similar triggers as Rhode Island, but there are specific procedures for LPs, including notifying the Secretary of State.

Winding Up Affairs

Dissolution isn’t simply closing the door and walking away. A formal process called “winding up” ensures creditors are paid, assets are distributed, and liabilities are settled.

Here’s how it unfolds:


Notice to Creditors:

Both states require notifying creditors of the dissolution to allow them to file claims. In Rhode Island, publication in a newspaper may be required for general partnerships.


Partnership Assets:

Partners typically share partnership assets after paying off debts. Rhode Island and Massachusetts have provisions for determining each partner’s share, either through the partnership agreement or by default rules (e.g., equal shares for general partners).


Liabilities and Debts:

Existing debts remain the responsibility of the partners, even after dissolution. Partners with unlimited liability (e.g., general partners in general partnerships) can be personally liable for outstanding debts.



Dissolving a partnership triggers tax implications. Consult with an accountant to navigate federal and state tax requirements.

State-Specific Considerations

While both Massachusetts and Rhode Island share the UPA framework, some unique aspects require attention:


Rhode Island:

  • General partners can be held personally liable for debts incurred within six months after filing a Statement of Dissolution, even if they weren’t involved.
  • Limited partners generally don’t have to file personal tax returns for the partnership (unless they participate in management).


  • A “winding up partner” can be designated to manage the dissolution process.
  • Limited partners who actively participate in management can lose their limited liability protection

When to Call for Help

Navigating the legal labyrinth of dissolving a partnership can be overwhelming. Consider seeking expert guidance from a business law attorney to:

  • Draft a partnership agreement with clear dissolution provisions.
  • Ensure proper compliance with state and federal laws.
  • Negotiate and mediate disputes between partners.
  • Represent you in potential litigation arising from the dissolution.

Dissolving a partnership doesn’t have to be a treacherous journey. By understanding the legal landscape, initiating the process correctly, and seeking professional guidance when needed, you can ensure a smooth and amicable conclusion to your entrepreneurial venture. Remember, communication, transparency, and adherence to legal requirements are your north stars in this journey. Let this blog be your compass, and navigate the path to a clear and satisfying closure for your partnership.

Disclaimer: This blog post is for informational purposes only and should not be construed as legal advice. Please consult with a qualified business law attorney at Sayer, Regan & Thayer for specific guidance on your situation.