A partnership at will is a partnership with no fixed end date and no agreement about how long it will last. Under the Partnership Act 1890, any partner can end it at any time simply by giving notice to the others. Most informal Scottish partnerships are partnerships at will, which leaves the business, its assets and every partner exposed.
This guide explains how a partnership at will arises, what the default rules say, how it can be dissolved, and why a written partnership agreement is the practical answer for almost every Scottish firm.
In brief
- A partnership exists whenever two or more people are carrying on a business in common with a view of profit (Partnership Act 1890, section 1). No paperwork is needed.
- If no fixed term has been agreed, it is a partnership at will. Any partner can dissolve it by notice (sections 26 and 32).
- A fixed term partnership that carries on after the term ends usually becomes a partnership at will (section 27).
- The default rules of the 1890 Act then govern profit shares, management, new partners and what happens on dissolution.
- A written partnership agreement replaces those defaults with rules the partners have actually chosen.
On this page
How does a partnership at will arise?
Section 1 of the Partnership Act 1890 defines partnership as “the relation which subsists between persons carrying on a business in common with a view of profit”. No legislation requires a general partnership in Scotland to register. Two people who start trading together and share the profits are partners, whether or not they think of themselves that way.
If the partners never agree how long the arrangement will last, it is a partnership at will. The same applies where there is a written agreement that is silent on duration. Under section 27, if a partnership for a fixed term carries on after that term expires without any express new agreement, the partners are presumed to continue as a partnership at will on the old terms, so far as they are consistent with that.
Partnerships at will are common in family businesses and farming partnerships, where arrangements often grew up informally over many years.
The default rules that apply
Without a written agreement, the 1890 Act fills the gaps. Section 24 contains the main default rules, and many partners are surprised by them:
| Issue | Default rule under the 1890 Act | Why it can cause problems |
|---|---|---|
| Profits and capital | Shared equally, regardless of what each partner put in | A partner who contributed most of the capital or investment gets no more |
| Salary | No partner is entitled to remuneration | A partner working full time is paid the same as one who is not |
| Management | Every partner may take part in management | No one has the final say |
| Ordinary decisions | Majority vote | Two partners can outvote a third on day to day business |
| New partners or change of business | Unanimous consent required | One partner can block growth |
| Expelling a partner | Not possible without an express power (section 25) | A partner in serious breach cannot be removed |
| Ending the partnership | Any partner can dissolve a partnership at will by notice | The business can be brought to an end overnight |
| Death or bankruptcy | Dissolves the partnership (section 33) | The firm ends at the worst possible moment |
How can a partnership at will be ended?
Section 26 says that where no fixed term has been agreed, any partner may end the partnership at any time by giving notice of their intention to all the other partners. Section 32(c) confirms that the partnership is then dissolved from the date stated in the notice or, if no date is given, from the date the notice is communicated. Where the partnership was constituted by a written deed, a notice in writing signed by the partner is enough.
There is no need to give a reason, and no minimum notice period applies unless the partners have agreed one. Once notice is given, it usually cannot be withdrawn without the consent of the other partners. A partnership can also be dissolved by the court in certain circumstances under section 35, for example where a partner is guilty of serious misconduct, but that requires litigation and is slower and more expensive.
What happens on partnership dissolution?
When a partnership at will is dissolved, the partnership business must be wound up. The partners keep their authority to finish existing transactions (section 38), and every partner can insist that partnership property is used to pay the firm’s debts and the surplus divided between the partners (section 39). In practice, this can mean selling a partnership asset the remaining partners wanted to keep, or arguing over whether a property, a tenancy or a piece of equipment was ever a partnership asset at all.
In Scotland, the partnership is a legal person with separate legal personality: it can own moveable property, hold leases, and sue and be sued. Dissolving it can therefore affect contracts, bank accounts, leases and any heritable property held by partners as trustee for the firm. Our guide on whether a Scottish partnership can own property explains how title to partnership property is usually held.
Why you should avoid a partnership at will
- No security: one of the partners can dissolve the partnership at short notice, even in a long established firm.
- Unfair default terms: equal profit shares and no salaries rarely reflect what the partners actually do.
- No exit route: there is no agreed way to value or buy out a departing or deceased partner’s share.
- Disputes: without a written agreement, arguments about what was agreed verbally often end up in court.
- Tax and succession: uncertainty about what is partnership property can complicate Inheritance Tax reliefs, the balance sheet and succession planning, particularly in farming businesses.
What a written partnership agreement should cover
A written partnership agreement does not need to be long, but it should make the key points clear in the partnership agreement rather than leaving them to the 1890 Act:
- The duration of the partnership, or a minimum notice period for leaving, so it is no longer a partnership at will.
- Capital contributions, profit shares and drawings.
- Management, decision making and the matters that need unanimous consent.
- A clause saying the firm continues on the death, retirement or bankruptcy of a partner.
- How an outgoing or deceased partner’s share is valued and paid.
- A provision allowing the partners to expel a partner for defined reasons, such as a serious breach of their obligations.
- Which assets are partnership property, and which belong to an individual partner.
- Restrictive covenants and a process for resolving disputes.
Where a partnership agreement allows the business to continue and sets clear exit terms, a partner leaving becomes a managed event rather than a crisis. Our partnership agreement solicitors can draft a new agreement or review an existing one.
Is a different structure better?
For some businesses, the better answer is a different vehicle. A limited liability partnership (LLP) gives members limited liability and continues despite changes in membership. A private limited company separates ownership from management and offers limited liability too. Each has different tax and HMRC reporting obligations. Our guide to the best legal structure for a new business in Scotland compares general partnerships, LLPs and companies, and our business formation solicitors can advise on the implications of each.
Frequently asked questions
Is a partnership at will legal in Scotland?
Yes. It is a normal general partnership under the Partnership Act 1890. The problem is not legality but the lack of security and the default rules that apply.
How much notice do I need to give to dissolve a partnership at will?
Unless the partners have agreed otherwise, no minimum period applies. Notice must be given to all the other partners, and dissolution takes effect from the date in the notice or the date it is communicated.
Can we turn a partnership at will into a fixed arrangement?
Yes. The partners can sign a written partnership agreement at any time, setting a fixed term or a notice period and replacing the default rules.
Does a partnership at will need to register with anyone?
A general partnership does not register at Companies House, but it must register with HMRC for Self Assessment, and for VAT if its turnover exceeds the threshold.
What happens to a farm tenancy held by a partnership at will?
It depends on the tenancy and how it is held. Dissolving the partnership can have serious consequences for agricultural tenancies, so advice from a specialist agricultural lawyer should be taken before any notice is served.
Speak to a partnership solicitor
If you are in business with someone and have nothing in writing, now is the time to fix it. We advise partners and clients across Scotland. Call us on 0141 471 9166 or book a free consultation.
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About the author
Scott Stevenson, Associate Director, Complete Clarity Solicitors
Scott Stevenson is an Associate Director at Complete Clarity Solicitors in Glasgow, the firm behind Business Lawyer Scotland. He studied at the University of Strathclyde and helps business owners and commercial clients work through practical legal problems. Colleagues value his calm, logical approach under pressure. Before law, Scott played football professionally from the age of 17, and he is now also a FIFA licensed football agent.
This guide reflects Scots law as at November 2026. It is general information, not legal advice for your circumstances.