Articles | Sunday - 13 / 07 / 2025 - 3:43 pm
In the business world, it’s not uncommon for a partner to decide to withdraw from a company. Whether the withdrawal is due to a disagreement, personal circumstances, or financial reasons, handling the situation legally is what protects the company’s stability. In this article, we’ll review the legal steps to manage a partner’s withdrawal.
1. Review the Articles of Association or Partnership Agreement
The first step is to review the clauses related to withdrawal or separation, which may include:
If there is no clear agreement, refer to the general provisions in the Companies Law.
2. Financial Valuation of the Partner’s Share
The value of the withdrawing partner’s share must be determined based on:
It is preferable to appoint a neutral financial expert to avoid disputes.
3. Draft a Formal Separation Agreement
This is a legal document signed by all partners that includes:
4. Amend the Commercial Register and Official Contract
The General Authority for Investment and the Tax Authority must be notified of the change in partners. This includes:
5. Deal with External Contracts and Employees
If the withdrawing partner was a party to contracts or responsible for employees, the contracts must be officially amended to ensure continuity without legal problems.
A partner’s withdrawal does not mean the end of the project; rather, it is a situation that must be managed with legal wisdom to protect everyone. With clear agreements and organized procedures, this stage can be smoothly navigated.
