Partnership dissolution When a partner withdraws there is an effect on the

number of a partnership which is one of the causes of

By the creation of a partnership, there is a giving firm of a
the dissolution
separate and distinct juridical personality so, when the
partners will decide to end the partnership, that is now 3, the third cause is when the business becomes
the dissolution. unlawful. If the business has been unlawful from the very
beginning the firm or the partner never had any juridical
For partnership, dissolution is caused by any change in the
personality
relation of the partner so, if one partner die if a new a
partner is admitted if a partner withdraws from a 4, the fourth is loss, is a specific thing is promised as a
partnership. contribution to the partnership but it is loss before
delivery the partnership is dissolved because one partner
Upon the dissolution, the partnership actually continues
cannot give his contribution. However, if the specific thing
until there is complete winding up of the business of the
is loss after delivery the transfer of ownership now
partnership. When a partnership is dissolved that means
commence the firm or the partnership will bear the loss
its juridical personality shall exists because it still has to
and the partner whose contribution has been loss will
go through the winding up.
remain to be a partner because you had already complied
There three final stages of a partnership, the first one is with his obligation.
dissolution the change in the relation of the partner it is
5, the death of any partner. Whether known or unknown
now the point where the partners cease to do business
to the others causes a decrease in the number of
together. The winding up, the partners will settle the
partners since there is an automatic dissolution of the
affairs of the partnership meaning they will wind up, they
partnership. Subsequently, one of the partners died
will continue what is started and then they will end any
before the expiration of the partnership life. Then
contract. They when the partnership affairs have already
substituted by his widow our questionable the widow or
been winded up then you have the termination.
the substitute became a general partner, the answer is
1830 and 1831 both these articles give the causes for the YES, she is a general partner because it is provided for in
dissolution of a partnership. 1830 it enumerates 8 causes the agreement between a party.
for dissolution.
6, the sixth cause is insolvency of any partner or of the
1, in this first reason the partnership agreement has not partnership itself, when we say insolvent it means the
been violated so, there is now a termination of the assets has less than the liability. This insolvency did not be
definite term or specific undertaking meaning the decreed by the court the reason is that when a partner is
partnership had already achieved what they intent to for insolvent it does not have anymore the capacity to make
the partnership. Then the partnership can also be its creditor so therefore in order not to prejudice the
terminated with the will of any partner who must act in creditor then the partnership shall be dissolved.
good faith, when the partnership has no definite term or
7, the cause number 7 is by the civil interdiction of any
no specific purpose. If the partner who request for the
partner. Civil interdiction means the loss of any rights.
dissolution acted in bad faith the partnership will still be
When you are convicted in any criminal offense it carries
dissolved because you already lose your trust and
with it’s the suspension of your civil rights, this civil right is
confidence but these partners because of bad faith may
the capacity to enter into a contract so, because a
be liable for damages.
partnership is a contract any partner who has been civilly
A partnership can also be dissolved without violation of interdicted shall not have the capacity to enter into a
any term by express will of all the partners. so, if one contract anymore and that means there is a less number
partner says you will not have anything more to do with of partnership and so the partnership shall be dissolve
the firm and the other does not object there is now an
8, the decree in court means they have one the partners
implied consent to dissolved the partnership.
have sought the help of the court to render the
Then the expulsion in good faith of a member. If a partner dissolution of a partnership. For example, A and B were
expelled in bad faith, there can also be an eventual partners at will they dissolved the partnership and A
dissolution because of the lack of confidence however assigned his interest to X because of the death the
there might be liability for damages. partnership assets where in the possession of fourth party
as a security may X demand accounting from the fourth
2, the second cause is in contravention of the agreement party. X is not a partner only an assignee, the partnership
between the parties, so even if there specified term one assets will possess by a fourth party. Is X allowed to
partner may cause the dissolution by expressly account for the ease an accounting for the property. YES,
withdrawing from the partnership even before the A has the right to demand because the partnership has
expiration of the period with or without justifiable cause. been dissolved. Dissolution by division, this is judicial
Remember, that this contract is an agreement between decree in court there has to be a case filed of the
the party so if the partner cannot agree anymore and one dissolution of the partnership
of the parties which request for the dissolution then it
shall be granted, however if the withdrawing partners Who can file for a dissolution – from any of the causes
reason for the dissolution of the partnership is not given in the first paragraph of article 1830 those which
justified he may be liable for damages. are voluntary.
The purchaser of a partner interest if the firm is as Example:
partnership at real and the period has already expired, if
A B and C are partners. A dies B knows this but still he
the period has not yet expired purchaser of the
later transacts with new business with X. a business which
partnership interests is merely an assignee therefore he
is not connected with the winding up. This notice of
cannot sue for dissolution.
dissolution was in the paper but X did not read the notice
One of the causes for the partnership dissolution is the and when X transacted with B, X thought all alone that at
insanity of a partner. The law does not require for a the time the firm had not yet been dissolve
previous declaration by the court that the partner has
If X had been a previous creditor is the firm liable? YES,
already been insane what needs here is an approval of
the firm is liable however when B knows this and he still
the court to prove that the partner is insane because
continue to transact business not related to the winding
when a partner is insane you already know that one those
up, he shall be liable because he knew of A’s death
absolutely prohibited to enter in the contract are those
insane persons. In order to protect the creditor, the creditors that the
business the firm for the partnership is liable but the
Therefore, there are kinds of dissolution. It may be caused
partners can go again, the partner who still transacted
by the act of the insolvency of the death or it may be
business knowing the partnership has already been
caused by the termination of the period.
dissolved. If X had never extended credit before is the
In article 1833, all the partners are still bound to each partnership liable. Assume that X is a new client the
other except in two instances: if the partner acting has answer now is NO because in the facts of the case there
knowledge of the dissolution and if the partner acting has already been publication and it X fault that he did
have knowledge of the death for the insolvency not read the advertisement.

If even after the dissolution the partner still enter into a Remember: under the law publication is equivalent to
contract because some of the partners did not have any notice to the whole world, so under this case if X had
knowledge then the partnership will still be liable never extended credit before only would be personally
although the partnership can recover from the other liable to X, have there be no notice of the dissolution and
partners who are acting. X did not actually know the dissolution the firm would
have still been liable.
Example:
When is the firm not bound anymore? In all cases
A B and C were partners. A resigned from the partnership
meaning to say the business is a new business with third
therefore it was dissolved. The newbies and yet he still
party who knew about the dissolution and when the firm
delivered to enter a new transaction with X an innocent
was dissolve it was unlawful to carry on the business
customer. The transaction is not needed for the winding
because when the business is unlawful there is no
up. Will the partnership be still liable? YES, if the firm
separate juridical personality.
asset is not enough X can still go after the individual
assets of A B and C. the partner shall be first personally A B and C are partners. A died. Meaning to say he
liable to the debts of the partnership if the partnership separate liability, is it liable for his share all the
assets is not sufficient to cover the debts. partnership obligation in good while he was still a partner.
The answer is YES because a partner is liable personally
If the firm asset is not enough X can still go after the
for partnership debts.
individual of A B and C. after all of the them have paid X.
the question is can A and C still recover from B who You are now the one who act in your business, the order
partner who acted despite his knowledge for the firms of payment of partnership the liability. First you have to
dissolution. YES because B should not have done what he give to the creditors these are third persons who are
did. strangers to the partnership. Second, you give to the
partners who are also creditors you return their capital,
capital first before the profit. Last, the profit must be
distributed.

When is there a creation of partnership liability during the What will happen to the industrial partner, during the
dissolution. A partnership liability is created when the liquidation of a firm the profit of a certain period time
business is for winding up, example the selling of cannot be exactly determine because there is no
property of the firm, to pay out the partnership debts sufficient data available
then when the contract is entered into to finish, complete
If the partnership assets are insufficient, be other partners
an unfinish transactions and the firm is also bound on
must contribute more money or property. Who can
completely new business with third parties who are
demand, in general any assignee of the benefit of the
considered as innocent.
creditor or any partner or legal representative.
Meaning to say the third party did not know that the
If A B and C are partners then A died ,is A still liable for
partnership has already been dissolved.
the contributed needed to pay off the partnership?. The
answer is YES for as wrong this obligation of the
partnership had been import before his death.