okay in today's video we'll take a look at the dissolution of a partnership
partnerships are fine if they work well but if they go bad then it can be very
uncomfortable for all partners involved and you may be involved in a partnership
where you really recognize or you recognize perhaps that the partnership
is really at an end it's run its natural course and you're
wondering how to dissolve the partnership or terminated
firstly the dissolution of the partnership can come around or come into
being in five different ways one would be automatically that is by the death or
bankruptcy of a particular partner another way would be by nervous so the
partnership Act of 1890 sets out section 26 or 30 to see that any partner can
actually dissolve the partnership are giving a notice in the absence of any
express or implied country agreement or in other words if there's no written
partnership agreement then a simple notice the written notice can bring
about dissolution of a partnership if there is a partnership agreement then
the partnership agreement may well specify how the partnership is to be
dissolved but in the absence of that then a written notice is fine illegality
is the third way that a partnership will be dissolved in other words it's
automatically this dissolved if it's involved in or engaged in some form of
illegality for is expiry so the term of the partnership which was agreed at the
outset has come to an end or the specific purpose for which the
partnership was set up has come to come into being and whatever the objective
was that has been achieved and then finally number five is a dissolution by
a court so section five of the part 35 rather of the partnership Act allows a
court to dissolve a partnership in certain circumstances there's quite a
wide range of circumstances it's at the discretion of the court to very extent
but also it will cover situations where partner might become of unsound mind
become capable for some reason perhaps a catastrophic accident is in breach of
the partnership agreement or whatever also if a partner has carried on in a
way that is damaging to the business or her partner commits a breach of the
agreement the partnership agreement consistently or whenever the court
decides that it's just unreasonable to dissolve us then a court has the power
to dissolve the partnership courts can also appoint a receiver a manager to
preserve partnership assets where it decides it's appropriate to do so then
in relation to the solution to two types of the solution one is a general
dissolution one is a technical solution a general dissolution occurs when the
partnership is ended and the businesses wound up and the partnership assets are
sold section 39 of the partnership at 1890 allows a partner to force the
general dissolution of the firm a technical dissolution will occur hurts
the change of partners either by a partner leaving or a new partner join
the firm the debtor bankruptcy or partner will also lead to a technical
dissolution it will only become a general solution if the remaining
partners decide to sell the assets of the partnership and wind up the business
to no rate to expel a partner in the Partnership Act of 1890 there for a
written partnership agreement is advisable if this is something that is
desirable and generally it would be desirable the consequences of the
solution then will her firm goes into general dissolution the assets of the
partnership will be sold to pay the debts of the partnership it has
insufficient asst funds to pay creditors then in the absence of an agreement to
the country each partner will have to contribute equally to the losses and
that's regardless of the contributions of capital by each partner at the outset
in order for a partner to protect himself after the solution he must give
notice to all existing customers or clients to avoid any liability after the
dissolution other consequences is vital at a former partner notify his customers
of the partnership that he is no longer a partner or he could be held liable
only the partnership Act 1894 any obligations incurred by the partnership
after his departure this would be on the basis of implied or ostensible Authority
in other words people dealing with the partnership are entitled to assume that
if they're dealing with that partner they're still dealing with the
partnership in the absence of any express notice any partnership agreement
it should provide for the share of a departing partner to be purchased by the
continuing partners and most provides for what will occur on the death of a
partner as you can see there are many good reasons to have a written
partnership agreements rafters if you're going into a partnership if you don't
have a written partnership agreement then the partnership Act of 1890 will
apply and it may be completely inappropriate in 2019 my contact details
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