PA 1890 s. 26

Any partner may end partnership at will - PA 1890 s. 26

PA 1890 s. 26: If no fixed term, any partner may end the partnership at any time by giving notice to all others. Deed requires written notice signed by partner.

Official text PA 1890 s. 26 — United Kingdom

Where no fixed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of his intention so to do to all the other partners. Where the partnership has originally been constituted by deed, a notice in writing, signed by the partner giving it, shall be sufficient for this purpose.

Text in force at .

Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.

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What it actually says

Section 26 is the exit route for a partnership at will - one where no fixed term has been agreed for its duration. Any partner may determine the partnership at any time on giving notice of his intention to do so to all the other partners. No reason is needed, no minimum period is specified, and the other partners cannot refuse. Where the partnership was originally constituted by deed, subsection (2) provides that a notice in writing signed by the partner giving it is sufficient.

Two consequences follow that partners often do not expect. The notice does not remove the retiring partner from the firm and leave the others carrying on; it determines the partnership as a whole, which then falls to be wound up under sections 38 to 44 unless the partners agree otherwise. That is the reason a partner who simply wants out of a business that should continue is usually better served by a negotiated arrangement than by a bare notice. And because the power exists at any time, a partner who has been excluded or outvoted has an immediate lever that does not depend on proving anything.

The section only applies where no fixed term has been agreed. A partnership for a defined term, or for a single venture, ends under section 32 by expiry or completion, and a partner who wants out earlier must rely on the agreement or on section 35. Where a fixed-term partnership is simply continued after the term ends, section 27 presumes that it continues on the old terms so far as consistent with a partnership at will - which brings section 26 back into play.

When it applies

  • A partner who wants to leave a business run with a friend on no written terms.
  • A partner frozen out of management who wants to force the issue.
  • A fixed-term partnership that has simply carried on past its end date.
  • Partners disagreeing about whether the firm should be wound up or bought out.
  • Working out whether a resignation letter ended the whole partnership or only one person's involvement.

What this section does not say

  • It does not apply where a fixed term was agreed. Those partnerships end under section 32 or by order of the court under section 35.
  • It does not let a partner retire while the firm continues. The notice determines the partnership; continuation requires agreement.
  • It does not require a period of notice, or a reason, or the agreement of anyone else.
  • It does not decide what the leaving partner gets. That comes from sections 42, 43 and 44.
  • It does not require writing unless the partnership was constituted by deed.

Worked examples

Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.

Illustrative example

Someone in a three-way business with no written agreement writes to the other two saying they are leaving. The others reply that everyone verbally agreed to give it five years, so the notice does not count.

How the wording applies

Section 26 applies to a partnership at will - one where no fixed term has been agreed - and there any partner may determine it at any time on notice, without a reason and without anyone's agreement. The fact that decides whether the section applies is whether a fixed term really was agreed, because an agreement for a five-year term would take the firm outside it and into sections 32 and 35 instead. The evidence for that is what the three actually did, not what one of them now recalls.

How the parties settled it

The three agree the firm is dissolved from an agreed date, that the two continuing partners buy the leaver's share at a valuation, and that the business carries on under a fresh written agreement between them.

Illustrative example

A partner who has been shut out of decisions and denied access to the accounts wants leverage but is worried that resigning will destroy a business that is otherwise doing well.

How the wording applies

The consequence partners rarely expect is that notice does not remove the leaver and leave the others trading: it determines the partnership as a whole, which then falls to be wound up under sections 38 to 44 unless the partners agree otherwise. The fact worth weighing before serving anything is exactly that - the power exists at any time and needs no proof of anything, but it is a blunt instrument aimed at the firm rather than at the conduct complained of.

How the parties settled it

Rather than serve notice, they agree a written variation restoring the excluded partner to management, with quarterly accounts, an agreed drawings level and an exit valuation formula if it fails.

Related sections

PA 1890 s. 32 Partnership Dissolves by Notice or Expiry: PA 1890 s. 32 PA 1890 s. 35 Court may dissolve partnership, PA 1890 s. 35 PA 1890 s. 44 Creditors, advances, capital: order under PA 1890 s. 44 PA 1890 s. 24 Equal profits split, no salary rules: PA 1890 s. 24

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We copy this text from the official publisher and re-check it against that source on every page load, but we cannot guarantee it is complete, current or free of error, and we accept no liability for any reliance on it. An amendment can take effect before a consolidation catches up. The publisher's own copy is linked below; where the two differ, it is the official one that counts.

This page reproduces the text of PA 1890 s. 26 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.

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