DISSOLUTION OF A PARTNERSHIP

After reading Dissolution of a Partnership, read also On Articles of Association of Homeowner’s Association 

• Dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated with the business

• On dissolution, the partnership is not terminated, but continues until the winding up of partnership affairs is completed

• A partnership may be dissolved even without violation of the agreement of the partners

T he dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.

On dissolution, the partnership is not terminated, but continues until the winding up of partnership affairs is completed.

What are the causes of dissolution of a partnership?

The law says:

Dissolution is caused:

1. Without violation of the agreement between the partners such as:

   a. By the termination of the definite term or particular undertaking specified in the agreement;

   b. By the express will of any partner, who must act in good faith, when no definite term or particular is specified;

   c. By the express will of all the partners who have not assigned their interests or suffered them to be charged for      their separate debts, either before or after the termination of any specified term or particular undertaking;

   d. By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the      agreement between the partners;

2. In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of the law, by the express will of any partner at any time;

3. By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership;

4. When a specific thing which a partner had promised to contribute to the partnership, perishes before the delivery; in any case by the loss of the thing, when the partner who contributed it having reserved its ownership, has only transferred to the partnership the use or enjoyment of the same; but the partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquired the ownership of the thing;

5. By the death of any partner;

6. By the insolvency of any partner of the partnership;

7. By the civil interdiction of any partner

8. By order of the court.

Also, any partner may apply for a court order for the partnership to be dissolved whenever:

1. A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind;

2. A partner becomes in any other way incapable of performing his part of the partnership contract;

3. A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business;

4. A partner willfully or persistently commits a breach of the partnership agreement, or otherwise conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him;

5. The business of the partnership can only be carried on at a loss;

6. Other circumstances which render a dissolution equitable.

 

 

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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