Dissolution and Winding Up
DISSOLUTION AND WINDING UP
DISSOLUTION - change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business; partnership is not terminated but continues until the winding up of partnership affairs is completed
WINDING UP - process of settling the business or partnership affairs after dissolution
CAUSES OF DISSOLUTION:
1. Without violation of the agreement between the partners
a. By termination of the definite term/ 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 undertaking is specified
c. By the express will of all the partners who have not assigned their interest/ charged them 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 bonafide in accordance with power conferred by the agreement
2. In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this article, by the express will of any partner at any time
3. By any event which makes it unlawful for business to be carried on/for the members to carry it on for the partnership
4. Loss of specific thing promised by partner before its delivery
5. Death of any partner
6. Insolvency of a partner/partnership
7. Civil interdiction of any partner
8. Decree of court under art 1831
GROUNDS FOR DISSOLUTION BY DECREE OF COURT (art 1831)
1. Partner declared insane in any judicial proceeding or shown to be of unsound mind
2. Incapacity of partner to perform his part of the partnership contract
3. Partner guilty of conduct prejudicial to business of partnership
4. Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him
5. Business can only be carried on at a loss
6. Other
DISSOLUTION - change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business; partnership is not terminated but continues until the winding up of partnership affairs is completed
WINDING UP - process of settling the business or partnership affairs after dissolution
CAUSES OF DISSOLUTION:
1. Without violation of the agreement between the partners
a. By termination of the definite term/ 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 undertaking is specified
c. By the express will of all the partners who have not assigned their interest/ charged them 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 bonafide in accordance with power conferred by the agreement
2. In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this article, by the express will of any partner at any time
3. By any event which makes it unlawful for business to be carried on/for the members to carry it on for the partnership
4. Loss of specific thing promised by partner before its delivery
5. Death of any partner
6. Insolvency of a partner/partnership
7. Civil interdiction of any partner
8. Decree of court under art 1831
GROUNDS FOR DISSOLUTION BY DECREE OF COURT (art 1831)
1. Partner declared insane in any judicial proceeding or shown to be of unsound mind
2. Incapacity of partner to perform his part of the partnership contract
3. Partner guilty of conduct prejudicial to business of partnership
4. Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him
5. Business can only be carried on at a loss
6. Other