Falling out with your business partner?

The friendship funded the business. The law can untangle it. Speak to Kestrel.

The short answer

If there is no written partnership agreement, the Partnership Act 1890 fills the gaps with defaults that surprise people: equal profit shares whatever each side put in, no power to expel a partner, and any partner able to dissolve the whole firm by notice. The first job is establishing which rules govern you; the second is protecting cash and clients while the exit is negotiated.

The law, in plain English

A partnership can exist without anyone signing anything: two or more people carrying on business together with a view to profit. Once it exists, either a written agreement or the 1890 Act governs it, and the Act's defaults are stark: equal shares, equal say, no expulsion, dissolution by notice from any partner.

Partners owe each other duties of the utmost good faith: full accounts, no secret profits, no competing. A partner diverting money or clients is in breach and must account for what was taken; the remedy can follow the money.

Exits are negotiated buyouts far more often than court battles, because full dissolution means winding the business up, which usually destroys value both sides built. Where a partner will not engage, dissolution and the taking of accounts is the lever that brings them to the table.

Law checked: August 2026. General information for England and Wales, not advice on your facts.

How it usually goes

1
Find the governing rules

Signed agreement, old draft, or nothing. This decides expulsion rights, shares and exit mechanics, and it changes the negotiation entirely.

2
Secure the business

Bank mandates to dual signatures, oversight of client communications and key contracts, and a freeze on unusual payments. Quietly and quickly.

3
Establish the numbers

What the firm owns and owes, what each partner has drawn, what a buyout is worth. An agreed accountant often defuses half the fight.

4
Negotiate the exit

Buyout, agreed split of clients, or structured wind-down, papered so it ends cleanly. Dissolution through the courts is the last resort, priced before it is threatened.

Not sure where you stand?

Tell Kestrel what happened. Plain answers on the spot, any hour, and a booked call with a lawyer if you want one.

Speak to Kestrel now

What you'll need

Time limits

Deadlines matter here.

No fixed statutory clock on most partnership remedies, but delay is dangerous in practice: assets and clients move, and a partner-at-will can dissolve on notice at any moment. Secure first, then negotiate.

What it costs

At launch: Position review and strategy from £320 + VAT · exit negotiation quoted flat, in writing. Illustrative until our published tariff goes live.

Who handles this at Kestrel

This sits in our Corporate, partnership & shareholder practice. The machine builds the file; the named lawyer does the law.

S
Shazia Ali

Solicitor · Co-Founder · Chief Executive Officer · Corporate, partnership & shareholder

Common questions

We are 50/50 and completely deadlocked.

With no casting vote and no deadlock clause, the levers are commercial: a mediated buyout, a Texas-style shootout if both can fund it, or dissolution as the endgame nobody wants. Most deadlocks settle once dissolution is priced.

My partner is taking money out of the business.

Partners must account for every penny. Move on the bank mandate first, demand the accounts, and claim back what was taken. Speed matters more than anger.

There is no written agreement at all.

Then the 1890 Act governs: equal shares regardless of contribution, no expulsion, dissolution by notice. Those defaults may help or hurt you; either way they set the negotiating table.

Can I just walk away?

Walking away does not end liability: you can remain liable for firm debts, and notice of dissolution has formal consequences. Leave through a documented exit, not the door.

Related guides

Speak to Kestrel now.

Any hour. Plain answers, a fixed quote in writing, and a named solicitor by 9:00.

Speak to Kestrel