LD 1609
pg. 106
Page 105 of 148 An Act To Establish the Uniform Partnership Act Page 107 of 148
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LR 1469
Item 1

 
wish to continue the business of a term partnership can not be
forced to liquidate the business by a partner who withdraws
prematurely in violation of the partnership agreement.

 
Those rules are gleaned from the separate UPA provisions
governing dissolution and its consequences. Under UPA Section
31(1)(b), dissolution is caused by the express will of any
partner when no definite term or particular undertaking is
specified. UPA Section 38(1) provides that upon dissolution any
partner has the right to have the business wound up. That is a
default rule and applies only in the absence of an agreement
affording the other partners a right to continue the business.

 
UPA Section 31(2) provides that a term partnership may be
dissolved at any time, in contravention of the partnership
agreement, by the express will of any partner. In that case,
however, UPA Section 38(2)(b) provides that the nonbreaching
partners may by unanimous consent continue the business. If the
business is continued, they must buy out the breaching partner.

 
4. Section 801(1) provides that a partnership at will is
dissolved and its business must be wound up upon the
partnership's having notice of a partner's express will to
withdraw as a partner, unless a later effective date is specified
by the partner. A partner at will who has already been
dissociated in some other manner, such as a partner who has been
expelled, does not thereafter have a right to cause the
partnership to be dissolved and its business wound up.

 
If, after dissolution, none of the partners wants the
partnership wound up, Section 802(b) provides that, with the
consent of all the partners, including the withdrawing partner,
the remaining partners may continue the business. In that event,
although there is a technical dissolution of the partnership and,
at least in theory, a temporary contraction of the scope of the
business, the partnership entity continues and the scope of its
business is restored. See Section 802(b) and Comment 2.

 
5. Section 801(2) provides three ways in which a term
partnership may be dissolved before the expiration of the term:

 
(i) Subsection (2)(i) provides for dissolution after a
partner's dissociation by death or otherwise under Section 601(6)
to (10) or wrongful dissociation under Section 602(b), if within
90 days after the dissociation at least half of the remaining
partners express their will to dissolve the partnership. Thus if
a term partnership had six partners and one of the partners dies
or wrongfully dissociates before the end of the term, the
partnership will, as a result of the dissociation, be dissolved
only if three of the
remaining five partners affirmatively vote


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