Dissolution of Partnerships

Question 1

Dissolution of Partnerships

Dissolution by Expiry or Notice

As per s32 PA 1890

Answer 1

If terminated unanimously, oral agreement is sufficient, whatever the format of agreement.

If terminated by notice of partner, the oral agreement is sufficient UNLESS its a deed- then writing.

Question 2

Dissolution of Partnerships

What happens on Death or Bankruptcy as per PA 1890?

1

Answer 2

Automatic termination

Question 3

Dissolution of Partnerships

5 Scenarios where a Partner may apply for court ordre to dissolve

5

Answer 3

1. s35(b) Permanent Incapacity
2. s35(c) Prejudicial Conduct (affects business or reputation)
3. s35(d) Persistent or wilful breach of partnerhsip agreement
4. s35(e) Carrying on at a loss- impossible to make a profit
5. s35(f)- its just and equitable that its dissolved.

Question 4

Dissolution of Partnerships

Order of Precedence of Distribution of Assets as per s44 PA 1890

3

Answer 4

1. Pay debts & liabilities to people who aren’t partners (lenders and suppliers)
2. Repay loans made to firm by partners
3. Surplus distributed to partners as per profit share

Treated as Directors and subject to CDDA 1986.