A partner who retires from a general partnership stays liable for every firm debt incurred before the retirement date, and can also be pursued for debts the firm runs up afterwards by anyone who has not been told they have gone. Notice is what cuts off the second risk: tell everyone who already deals with the firm directly, advertise the retirement in the Gazette for everyone else, and take your name off everything the firm issues.

Why is a retiring partner still exposed after leaving?

There are two separate exposures, and they need different fixes.

  • Debts incurred before you left. Section 17(2) of the Partnership Act 1890 says a retiring partner does not cease to be liable for partnership debts or obligations incurred before retirement. Notice does nothing for these. The only way out is a release under section 17(3): an agreement between you, the partners in the firm as newly constituted and the creditor, which can be express or inferred from the course of dealing between the creditor and the new firm.
  • Debts incurred after you left. Section 36(1) lets a person who deals with the firm after a change in its constitution treat all apparent members of the old firm as still being members until they have notice of the change. Until that person has notice, you can be sued for the new debt as if you were still a partner.

This page deals with the second exposure: how to give notice properly. The wider exit process, including indemnities and the payout, is covered in leaving a partnership, and the underlying liability rules in partners’ joint and several liability.

Who needs notice, and who is already protected?

Section 36 protects people who could reasonably think you were still a partner. It does not protect people who never knew you were one. Section 36(3) says the estate of a partner who dies or becomes bankrupt is not liable for partnership debts contracted after the death or bankruptcy, and a partner who retires without having been known to the person dealing with the firm to be a partner is not liable to that person for debts contracted after retirement.

So the question for each creditor is whether they knew, or had been shown, that you were a partner. A partner whose name was on the letterhead, website, engagement letters or signage was known to almost everyone. Notice is needed for the first group and is still sensible for the second, because it is hard to prove later who did and did not know.

What kind of notice does each creditor need?

Who What the law requires Practical step
People who dealt with the firm before you retired Actual notice. The Gazette advertisement in section 36(2) is notice only to people who had no dealings with the firm before the change. A dated letter or email to each one, stating the retirement date.
People who first deal with the firm after you retire An advertisement in the London Gazette (principal place of business in England or Wales), the Edinburgh Gazette (Scotland) or the Belfast Gazette (Northern Ireland) counts as notice under section 36(2). Place a notice of retirement in the right Gazette as soon as you leave.
Creditors already owed money at the retirement date Notice does not release you (section 17(2)). Ask for a written release under section 17(3) for anything significant.
HMRC, for VAT Under section 45(2) of the Value Added Tax Act 1994, a former partner is treated as still a partner for VAT until the change is notified to HMRC. Send form VAT2 removing you as a partner.

How do you give actual notice to existing contacts?

Build the list from the firm’s records rather than from memory: the sales and purchase ledgers, the bank, landlords, hire purchase and leasing companies, utilities, insurers, regular subcontractors and every client with a current engagement letter. Then write to each one. The letter should say that you retired from the firm on a stated date, that you are no longer a partner and have no authority to act for the firm, and which partners are continuing. Keep a copy of every letter and the evidence of sending, because you may need to prove later that a particular creditor had notice.

Update the firm’s paperwork at the same time. A partnership trading under a business name (anything other than the partners’ surnames with permitted additions) must state the name of each member, with an address for service, on business letters, written orders, invoices, receipts and written demands for payment under section 1202 of the Companies Act 2006. Section 1203 lets a partnership of more than 20 persons instead keep a list of partners at its principal place of business, provided its documents say where the list can be inspected. Either way your name has to come off, and a revised partner list on every invoice reinforces the letters.

How do you place a Gazette notice if the others will not cooperate?

The Gazette that counts depends on where the firm’s principal place of business is, not where you live. The notice should identify the firm by its name and address, name you as the retiring partner and give the retirement date.

If the continuing partners drag their feet, section 37 helps: on the retirement of a partner, any partner may publicly notify it and may require the other partners to concur in all necessary or proper acts that cannot be done without them. A retirement deed, or the partnership agreement itself, should include an express obligation on the continuing partners to sign the Gazette notice and the client letters, so you do not have to rely on that statutory right after the event.

What does notice not protect you from?

  • Old debts. Anything incurred while you were a partner stays with you under section 17(2) unless the creditor releases you.
  • Holding out. Under section 14, anyone who represents themselves, or knowingly allows themselves to be represented, as a partner is liable as a partner to anyone who gives credit to the firm on the faith of that representation. A Gazette notice does not help if your name is still on the website, the van or the email signature.
  • Guarantees. Section 18 revokes a continuing guarantee given to a firm, or to a third person in respect of a firm’s transactions, as to future transactions when the firm’s constitution changes, but only in the absence of agreement to the contrary. Bank guarantees commonly contain such an agreement, so check the wording and ask for a written release.

Is it different for LLPs and limited partnerships?

Yes. An LLP is a body corporate with legal personality separate from its members (section 1(2) of the Limited Liability Partnerships Act 2000), and section 1(5) says the law relating to partnerships does not apply to it except as provided, so section 36 is not the issue there; see LLPs explained.

In a limited partnership, a change in the partners must be notified to Companies House within seven days under section 9 of the Limited Partnerships Act 1907. In a private fund limited partnership, section 6(6) of that Act disapplies section 36(1) when a partner ceases to be a member, but section 10(1A) requires notice of a general partner leaving to be advertised in the Gazette forthwith, and until then people dealing with the firm can treat the outgoing general partner as still in place (section 10(1B)). The rules for these funds are explained in private fund limited partnerships.

How does this work in practice?

Illustration only. Priya retires on 31 March from a four partner design practice that trades as Northgate Studio from Bristol. Her name appears on the firm’s invoices under section 1202.

  • On 1 April the firm writes to its 60 clients and 25 suppliers, the bank and the landlord, naming Priya as retired. A London Gazette notice signed by all four partners appears on 8 April. New invoices list three partners.
  • A printing supplier that received the letter extends £8,000 of credit in May. Priya is not liable for that debt.
  • A paper merchant that had never dealt with the firm supplies stock in June after the Gazette notice. Priya is not liable.
  • A long standing client was missed from the letter run because it was filed under a parent company. In May it pays a £5,000 deposit for work the firm never delivers. That client had dealt with the firm before, so the Gazette notice is not notice to it, and it can treat Priya as still a partner. Her protection is the indemnity in her retirement deed.
  • The VAT2 removing Priya reaches HMRC in mid April. Until it is notified she is treated as a partner for VAT under section 45(2).

What mistakes leave retiring partners exposed?

  • Placing a Gazette notice and assuming it covers existing clients and suppliers. It does not.
  • Writing only to current customers and forgetting lenders, landlords, lessors and dormant accounts that may trade again.
  • Leaving your name on the website, signage or email footers, which risks holding out liability under section 14.
  • Assuming notice releases you from debts already incurred. Only a creditor’s agreement under section 17(3) does that.
  • Forgetting the VAT2, so you remain a partner for VAT purposes; the wider tax steps are in partners joining and leaving.
  • Agreeing an exit without a clause requiring the continuing partners to sign notices, then having to rely on section 37.

Company directors can protect the business against the cost of an HMRC check with tax investigation insurance, which pays up to £100,000 of accountant’s fees with Solar Protect. Read how our cover works or get a quote.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.