Page 158 - Microsoft Word - 00 Prelims.docx

Chapter 6

Dissolution

How does a partnership come to an end?

According to the Partnership Act 1890 a partnership will automatically end in the
following situations:

 Death or bankruptcy of a partner (unless the partnership agreement states
otherwise)

 Expiry of a fixed term

 Completion of a single joint venture if stated that this will happen in the
partnership agreement

 Continuation of the partnership would be illegal

 A partner gives notice for the firm to be dissolved

 Order of the court.

In addition the partnership agreement may include other situations which would lead
to the dissolution of the partnership.

Illustration 1 – End of a partnership

HUDGELL, YEATES AND CO v WATSON 1978

Facts:

Practising solicitors are required by law to have a practising certificate. One of
the partners in a firm of solicitors forgot to renew his certificate which meant it
was illegal for him to practise.

Held:

The failure to renew the certificate brought the partnership to an end, although a
new partnership continued between the other two partners.

154