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33.1 Law for Business, 15e by Ashcroft Chapter 33: Dissolution of a Partnership Law for Business, 15e, by Ashcroft, © 2005 West Legal Studies in Business,

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Presentation on theme: "33.1 Law for Business, 15e by Ashcroft Chapter 33: Dissolution of a Partnership Law for Business, 15e, by Ashcroft, © 2005 West Legal Studies in Business,"— Presentation transcript:

1 33.1 Law for Business, 15e by Ashcroft Chapter 33: Dissolution of a Partnership Law for Business, 15e, by Ashcroft, © 2005 West Legal Studies in Business, a Division of Thomson Learning

2 33.2 Chapter 33 Objectives  List the methods the partners may use to dissolve a partnership.  Discuss the reasons why a court may order dissolution of a partnership.  Identify those events that result in dissolution of a partnership by operation of the law.  Explain who should be notified of a partnership dissolution.

3 33.3  If no date for dissolution is fixed, the partners dissolve the agreement at any time.  If one partner voluntarily withdraws, the business can continue, but the legal partnership itself is dissolved  A partner be expelled by any activity the partners agree upon in the partnership agreement. Dissolution by Acts of the Parties

4 33.4 Dissolution by Judicial Decisions  Insanity of a partner  Insanity must be by court decree.  Incapacity  If partner develops an incapacity that makes it impossible for the partner to perform in the partnership.

5 33.5 Dissolution by Judicial Decisions  Misconduct  If one partner acts to the detriment of the company.  Futility  All partnerships must operate for a profit. If this clearly is not being met, the partnership must be dissolved.

6 33.6 Dissolution by Operation of the Law Death  Death of one partner dissolves partnership unless otherwise stated. Bankruptcy  Unlimited liability of the partner is destroyed. Illegality  If a partnership is formed legally then becomes illegal, it is dissolved.

7 33.7 Notice of Dissolution  To protect third parties, notice of dissolution must be given.  Usually customers and creditors are notified by mail.  Giving notice is not necessary when:  Someone was once a partner.  The partnership was dissolved by operation of the law.  The partnership was dissolved by judicial decree.  A dormant or secret partner retires.

8 33.8 Distribution of Assets Partners who have advanced money are entitled to reimbursement Each partner is entitled to the return of contributed capital Remaining assets are distributed equally

9 33.9 The End ! LAW


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