Please enable JavaScript.
Coggle requires JavaScript to display documents.
DISSOLUTION OF PARTNERSHIP - Coggle Diagram
DISSOLUTION OF PARTNERSHIP
METHODS OF DISSOLUTION
General rule?
Dissolution can be in any manner & for any reason as stated in the p/ship agreement.
Absence of any agreement?
Reference be made to the Act.
Dissolution by Agreement
Clifford v Timms
Held: Notice valid in accordance with the deed.
Dissolution - s.34
1)
S.34(1)(a)
- A partnership entered for a fixed period is dissolved by the expiration of that period.
2)
S.34(1)(b)
- A partnership entered for a single adventure is dissolved by the termination of that adventure.
3)
S.34(1)(c)
- A partnership with undefined time is dissolved by notice.
Notice to Dissolve
a)
communicated
to all partners, (only effective once it is communicated)
Refer to:
Ariff v Yeo
b) notice
may be prospective
Refer to:
McLeod v Dowling
c) notice should be
well-informed
to others.
Refer to:
Tan Boon Cheo
Partnership at will
When the p/ship agreement does not have any provision relating to dissolution.
Refer to:
Abbott v Abbott
Retirement from p/ship at will
a) S.28(1)
no fixed term for the duration of p/ship
a partner may determine by notice
b) S.28(2)
where there's a written p/ship agreement, then the notice should be in writing and signed.
Conversion of fixed-term p/ship into p/ship at will
a)
S.29(1)
upon expiration of the fixed term & partners decided to continue w/out any new terms, the p/ship shall still be valid as long as the terms are consistent with p/ship at will.
b)
S.29(2)
there's a continuance of a fixed-term p/ship if partners continue business w/out any settlement/liquidation of the p/ship affairs.
Refer to:
Re Chop v Yew Sing
Kam Hoy Trading v Hup Aik Tin Mining
Dissolution by Death & Bankruptcy
Section 35(1)
These are grounds for dissolution of p/ship unless otherwise provided in the agreement.
Date of the dissolution = Date of commencement of the bankruptcy
Refer to:
Lee Cho Yam Holdings Sdn Bhd
Dissolution due to involuntary assignments
Section 35(2)
If a partner's share in the p/ship property has been charged by a court order for his separate debts, the other partners have the option to dissolve the p/ship.
Dissolution due to illegality
Section 36
A p/ship would be dissolved upon the happening of an event which makes it unlawful to carry on the business
For instance, a p/ship comprising enemy aliens will be illegal due to the outbreak of war.
Illegality is the only ground for immediate dissolution.
Refer to:
Hudgell Yeates & Co v Watson
Dissolution by the court
Section 37
: upon applications by a partner, the court may dissolve the p/ship on any of the following grounds.
(a)
Insanity
The state of insanity = permanent
Court will seek expert evidence
Refer to:
Jones v Noy
(b)
Permanently incapable
No prospect of recovery
Refer to:
Whitwell v Arthur
(c)
Prejudicial Conduct
a partner had committed serious misconduct which prejudicially affect the firm's business
Refer to:
Carmichael v Evans
Clifford Timms
(d)
Wilful & persistent breach
Court may grant dissolution order under this ground if there's a complete & permanent state of animosity among the partners so as to destroy the basis of mutual confidence between them.
Refer to:
Harrison v Tenhant
(e)
Business was at loss
must prove that it's impossible to make profit
Refer to:
Handyside v Campbell
(f)
Just & equitable
Give court a wide discretion
Refer to:
Ebrahimi v Westbourne Galleries Ltd
*
Ting Tien Kwang & Ors v Kong Sung Seng & Ors
Dissolution by order of Arbitrator
may be dissolved under this ground if it is provided in the p/ship agreement