Partnership and joint venture disputes in Michigan

If there is no definite term or particular undertaking, any partner can dissolve the partnership by express will (MCL 449.31(1)(b)). If there is a term, a partner can still cause dissolution by express will, but doing so against the agreement can make that partner liable to the others for damages under MCL 449.38(2). The Court of Appeals has said there can be no indissoluble partnership.

Under Michigan's Uniform Partnership Act, MCL 449.1 et seq., dissolution means a partner ceasing to be associated in carrying on the business, which is different from winding up (MCL 449.29). Dissolution does not end the partnership; it continues until winding up is complete (MCL 449.30). Dissolution without violating the agreement happens when a definite term or particular undertaking ends, by the express will of any partner when no term or undertaking was specified, by the express will of all partners who have not assigned their interests or had them charged for their separate debts, or by expulsion under a power in the agreement (MCL 449.31(1)). Under MCL 449.31(2), a partner may also dissolve by express will at any time even in contravention of the agreement. That choice has a price. Partners who did not cause the dissolution can recover damages for breach of the agreement from the partner who did, and if they all want to continue the business under the same name during the agreed term they may do so by paying the departing partner the value of the interest, less damages, or securing it by court-approved bond. In valuing that interest, good will is not considered (MCL 449.38(2)). In Urbain v Beierling, 301 Mich App 114 (2013), the Court of Appeals held a short-lived partnership with no set term could be dissolved by any partner's express will, and said there can be no indissoluble partnership. It also rejected a breach of fiduciary duty claim that rested on the dissolution itself. This answer covers general partnerships. Limited partnerships and LLCs are governed by different statutes.

Authority: MCL 449.31; MCL 449.38(2); MCL 449.29 and MCL 449.30; Urbain v Beierling, 301 Mich App 114 (2013). Reviewed Oct. 2026.

A partner is entitled to true and full information about partnership affairs on demand (MCL 449.20), and to a formal account if wrongfully excluded from the business or its property, if an agreement provides for it, or whenever circumstances make it just and reasonable (MCL 449.22). In Urbain v Beierling the Court of Appeals said a formal accounting should be provided within a reasonable time after dissolution without the need for a lawsuit.

Three sections of the Uniform Partnership Act work together here. MCL 449.20 requires partners to render on demand true and full information of all things affecting the partnership to any partner. MCL 449.21(1) requires every partner to account to the partnership for any benefit, and to hold as trustee any profits derived without the other partners' consent from any transaction connected with the formation, conduct, or liquidation of the partnership or from use of its property. MCL 449.22 gives any partner a right to a formal account if wrongfully excluded from the business or its property, if the right exists under an agreement, as provided by section 21, or whenever other circumstances render it just and reasonable. Urbain v Beierling, 301 Mich App 114 (2013), held that the partners there should have provided a formal accounting within a reasonable time after the partnership dissolved and that litigation should not have been needed to get it. The plaintiff still lost that claim, because the partnership had no profits or assets to share, and the court said the Act aims to make a partner economically whole. The practical lessons are to put information requests in writing, to collect the agreement, capital records, tax returns, and bank records you already have, and to separate two questions: what you are owed, and whether a court should dissolve the partnership. Taking records or money you are not entitled to can create problems of its own, so get advice first.

Authority: MCL 449.20; MCL 449.21(1); MCL 449.22; Urbain v Beierling, 301 Mich App 114 (2013). Reviewed Oct. 2026.

On application by or for a partner, MCL 449.32(1) says the court shall decree dissolution when a partner is incapable of performing his part, engages in conduct that tends to prejudice the business, willfully or persistently breaches the agreement or makes it not reasonably practicable to carry on with him, when the business can only be carried on at a loss, or when other circumstances render dissolution equitable. Where a partner can dissolve at will, a decree may be unnecessary.

MCL 449.32(1) lists the grounds. The court shall decree dissolution on application by or for a partner when: (a) a partner has been judicially declared of unsound mind or is shown to be of unsound mind; (b) a partner becomes in any other way incapable of performing his part of the partnership contract; (c) a partner has been guilty of conduct that tends to affect prejudicially the carrying on of the business; (d) a partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him; (e) the business can only be carried on at a loss; or (f) other circumstances render a dissolution equitable. The purchaser of a partner's interest can also apply in the situations MCL 449.32(2) describes. Whether your facts fit grounds (c), (d), or (f) is the contested part of most cases, and the statute does not define those terms. A decree is not always needed. Where the partnership has no definite term or undertaking, any partner can dissolve by express will under MCL 449.31(1)(b), and Urbain v Beierling, 301 Mich App 114 (2013), says there can be no indissoluble partnership. A court case matters most when the agreement fixes a term, when partners disagree about fault, or when you need court supervision of winding up, which any partner, legal representative, or assignee may obtain on cause shown under MCL 449.37. Dissolution of LLCs and corporations follows different statutes.

Authority: MCL 449.32; MCL 449.31(1)(b) and MCL 449.37; Urbain v Beierling, 301 Mich App 114 (2013). Reviewed Oct. 2026.

Dissolution does not end the partnership; it continues until winding up is complete (MCL 449.30). Unless otherwise agreed, partners who did not wrongfully dissolve it have the right to wind up, and any partner can ask the court to supervise for cause (MCL 449.37). Under MCL 449.40, creditors other than partners are paid first, then partners owed other than capital and profits, then capital, then profits, and partners must contribute to cover any shortfall in liabilities.

Winding up means gathering the assets, paying and settling debts, and distributing any surplus (Urbain v Beierling, 301 Mich App 114 (2013), citing Wanderski v Nowakowski). Who does it: unless otherwise agreed, the partners who have not wrongfully dissolved the partnership, or the legal representative of the last surviving partner, have the right to wind up, and any partner, legal representative, or assignee may obtain winding up by the court on cause shown (MCL 449.37). In Urbain, the court said the plaintiff should have been given a chance to take part in winding up, although she could not show damages because the business had no surplus. Who gets paid: subject to any contrary agreement, MCL 449.40(b) ranks the liabilities in this order: debts to creditors other than partners; debts to partners other than for capital and profits; debts to partners for capital; and debts to partners for profits. Assets are the partnership property plus the partners' required contributions, and, except as MCL 449.46 provides, the partners shall contribute the amount needed to satisfy the liabilities. If a partner is insolvent, not subject to process, or refuses to contribute, the others contribute their share in the proportions in which they share profits (MCL 449.40(d)). A partner who pays more than his or her share can enforce contribution from the others (MCL 449.40(f)), and the individual property of a deceased partner remains liable for these contributions (MCL 449.40(g)). Valuation is made as of the dissolution date. A partner who caused a wrongful dissolution has different rights under MCL 449.38(2).

Authority: MCL 449.40; MCL 449.30 and MCL 449.37; Urbain v Beierling, 301 Mich App 114 (2013). Reviewed Oct. 2026.

Leaving does not erase debts that already exist. MCL 449.36(1) says dissolution does not discharge a partner's existing liability, though you can be discharged by agreement among you, the creditor, and the person or partnership continuing the business, which may be inferred from the creditor's course of dealing after learning of the dissolution. After dissolution a partner can still bind the partnership to some outsiders who had no notice (MCL 449.35).

MCL 449.36 covers debts that existed at dissolution. Dissolution does not discharge a partner's existing liability. A partner is discharged only by an agreement among the partner, the partnership creditor, and the person or partnership continuing the business, and such an agreement may be inferred from the course of dealing between a creditor who knows of the dissolution and the person or partnership continuing the business (MCL 449.36(2)). If someone agrees to assume the obligations, the partners whose obligations were assumed are discharged as to a creditor who knows of the agreement and consents to a material alteration in the nature or time of payment (MCL 449.36(3)). MCL 449.35 covers new dealings after dissolution. A partner can still bind the partnership by acts appropriate for winding up or completing unfinished transactions. A partner can also bind it by a transaction that would have bound it before dissolution if the other party had extended credit to the partnership before dissolution and had no knowledge or notice of the dissolution, or had not extended credit but knew of the partnership, had no knowledge or notice of the dissolution, and the dissolution was not advertised in a newspaper of general circulation where the business was regularly carried on. A partner who was unknown and inactive before dissolution is liable on those later transactions only out of partnership assets (MCL 449.35(2)). If the business continues, MCL 449.41 can make the continuing business liable to the old creditors, and MCL 449.42 can make a retired partner an ordinary creditor for the value of his or her interest. Keep written proof of the date you left and of notice to creditors. Tax consequences of leaving are a question for a CPA.

Authority: MCL 449.36; MCL 449.35; MCL 449.41 and MCL 449.42. Reviewed Oct. 2026.

It can. In Kay Investment v Brody Realty, the Court of Appeals treated a joint venture, an association to carry out a single business enterprise for profit, as legally distinct from a partnership. It held joint venturers owned the real property as tenants in common, so every owner had to consent to a sale or the property could be partitioned. Which label applies turns on the agreement and how the owners actually operated.

A partnership is an association of two or more persons to carry on as co-owners a business for profit (MCL 449.6). In Kay Investment Co, LLC v Brody Realty No 1, LLC, 273 Mich App 432 (2006), the Court of Appeals described a joint venture as an association to carry out a single business enterprise for profit, and listed six elements drawn from earlier cases: an agreement showing intent to undertake a joint venture; a joint undertaking; a single project for profit; sharing of profits and losses; contribution of skills or property; and community interest and control over the subject matter. The court said Michigan Supreme Court decisions treat the two as separate relationships carrying different legal consequences, so it was not free to treat them as identical. The consequence in that case was ownership. A partnership can own real property as tenants in partnership under the Uniform Partnership Act. Joint venturers hold real property as tenants in common, so no co-owner could sell the whole without consent of the others, and a co-owner could seek partition under MCL 600.3304. The court found a joint venture from the title of the agreement, the single shopping center project, the tenancy in common title, the absence of partnership language, and the way interests passed to estates and trusts. The decision was 2 to 1; the dissent would have found a partnership, relying on Byker v Mannes (Mich 2002) for the point that the owners' conduct, not their subjective intent, decides whether a partnership exists. No later published decision that sets out accounting and winding-up rules for joint ventures has been identified, so rights outside the property question depend heavily on your written agreement. Partnership status can also arise from conduct, so a label alone will not control.

Authority: Kay Investment Co, LLC v Brody Realty No 1, LLC, 273 Mich App 432 (2006); MCL 449.6(1). Reviewed Oct. 2026.

It depends on the claim, and one point lacks a published Michigan decision. MCL 449.43 says the right to an account accrues at the date of dissolution. A breach of fiduciary duty claim is generally subject to the three-year period in MCL 600.5805(2), and under MCL 600.5827 a claim accrues when the wrong was done, not when it was discovered, and breach of contract is six years (MCL 600.5807(9)). An unpublished Court of Appeals opinion applied six years to a UPA accounting claim, but it is not binding.

Different claims against a former partner have different clocks. For an accounting, MCL 449.43 says the right to an account accrues to a partner or legal representative, against the winding-up partners, the surviving partners, or the person or partnership continuing the business, at the date of dissolution unless the partners agreed otherwise. Dissolution is the change in the relationship when a partner ceases to be associated in carrying on the business (MCL 449.29). In Reindel v Reindel, 253 Mich 680 (1931), the Michigan Supreme Court recorded it as agreed that the statute of limitations applies to partnership accounts but, as a general rule, does not begin to run until dissolution or until there has been a settlement or accounting. The statute does not state a number of years for the accounting claim. The Court of Appeals, in an unpublished 2022 opinion, Stevens Mineral Co LLP v Stevens (Docket No. 360238), applied the six-year period in MCL 600.5813 and found the claim timely when the partnership dissolved in 2018 and suit was filed in 2020. That opinion is not binding (MCR 7.215(C)(1)), and no published Michigan decision setting the period has been identified. A claim for breach of fiduciary duty is treated differently. Meyer & Anna Prentis Family Foundation v Barbara Ann Karmanos Cancer Institute, 266 Mich App 39 (2005), applied the three-year period for injury to person or property (now MCL 600.5805(2)) to a common-law tort claim. Prentis, quoting an earlier case, also said a fiduciary claim accrues when the beneficiary knew or should have known of the breach, and the Court of Appeals has repeated that. But MCL 600.5827 says a claim accrues when the wrong was done, and the Supreme Court has rejected a judge-made discovery rule (Trentadue v Buckler Automatic Lawn Sprinkler Co, 479 Mich 378, 391 to 392 (2007)). Until a court reconciles the two, count from the date of the wrongful act. Breach of contract is six years under MCL 600.5807(9). Laches can also bar a claim before the period expires. Because the shortest period may control, treat the earliest likely deadline as the real one.

Authority: MCL 449.43 and MCL 449.29; MCL 600.5805(2); MCL 600.5807(9); MCL 600.5813; Reindel v Reindel, 253 Mich 680; 235 NW 861 (1931); Meyer & Anna Prentis Family Foundation, Inc v Barbara Ann Karmanos Cancer Institute, 266 Mich App 39 (2005); Stevens Mineral Co LLP v Stevens, unpublished opinion of the Court of Appeals, issued Oct. 13, 2022 (Docket No. 360238); Trentadue v Buckler Automatic Lawn Sprinkler Co, 479 Mich 378, 391-392 (2007); MCL 600.5827. Reviewed Oct. 2026.