Law 220

Partnership Law

Law 330

Dissolution

Non - Judicial Dissolution

Period: s32(a)
Purpose: s32(b); Windsor v Shroeder (1979) 129 NLJ 1266 Notice: s32c

Death: s33(1)

Non-Judicial Dissolution
Bankruptcy: s33(1) Illegality: s34

the business is unlawful: Everet v Williams (1725) 9 LQR197

the partners cannot lawfully form a partnership Hudgell Yeates & Co. v Watson [1978] 2WLR 661

Judicial Dissolution
Mental Incapacity: s35(a) Physical Incapacity:s35(b) Whitwell v Arthur (1865) 35 Beav 140 - disability must be permanent Conduct prejudicial to the business: s35(c) Willful or persistent breach of the partnership agreement: s35(d) Cheesman v Price (1865) 35 Beav 142; Hurst v Bryk (2000)

Judicial Dissolution
Loss: s35(e) Handyside v Campbell (1901) 17 TLR 623 - temporary losses Just and Equitable Ground: s35(f) Harrison v Tennant (1856) 21 Beav 482

Financial Effects of Dissolution

Realisation of Assets Section 39 Sale of Goodwill excess of purchase price over the net tangible assets

Distribution of Assets
Section 44 In settling accounts between the partners after a dissolution of partnership, the following rules shall, subject to any agreement, be observed(a) Losses, including losses and deficiencies of capital, shall be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportion in which they were entitled to share profits-

Distribution of Assets ctd

44 (b) The assets of the firm including the sums, if any, contributed by the partners to make up losses or deficiencies of capital, shall be applied in the following order 1.In paying the debts and liabilities of the firm 2.In paying to each partner rateably what is due from the firm to him for advances as distinguished from Capital

Distribution of Assets ctd

3.In paying to each partner rateably what is due from the firm to him in respect of capital 4.The ultimate residue, if any, shall be divided among the partners in the proportion in which the profits are divisible.

Insolvent Partnerships
Insolvent Partnerships Order 1994 (SI 1994/2421) provides a code for the winding-up of insolvent partnerships Voluntary arrangements

Administration orders
Winding up by the Court

Law 220

Partnership Law

Law 330