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Limited Partnerships Act 2008

General - Terminating events, liquidation, and deregistration

90: Grounds for Court appointment of liquidator

You could also call this:

"When can a court choose someone to close down a limited partnership?"

Illustration for Limited Partnerships Act 2008

The Court can appoint a liquidator to a limited partnership for several reasons. You might be wondering what these reasons are. The Court can do this if a terminating event has occurred and no liquidator has been appointed, or if the sole general partner is bankrupt or in liquidation.

If the sole general partner is incapacitated, the Court can appoint a liquidator. This means the partner is unable to make decisions due to a compulsory treatment order under the Mental Health (Compulsory Assessment and Treatment) Act 1992, or an order under the Protection of Personal and Property Rights Act 1988, or their property is managed by a trustee corporation.

The Court can also appoint a liquidator if any partner is unable to perform their obligations, or if a partner's conduct has prejudiced the business. This includes if a partner has breached the partnership agreement, or if their conduct makes it impracticable for other partners to carry on the business. The Court can appoint a liquidator if the limited partnership is unable to pay its debts, or if it is just and equitable that the partnership terminates.

Additionally, the Court can appoint a liquidator if the limited partnership or its general partners have provided inaccurate information to the Registrar, or if they have failed to comply with duties under this Act in a persistent or serious way.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1139254.

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89: Court may appoint liquidator, or

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Part 2General
Terminating events, liquidation, and deregistration

90Grounds for Court appointment of liquidator

  1. The Court may appoint a liquidator to a limited partnership under section 89(1) on any of the following grounds:

  2. a terminating event under section 86 has occurred, and a liquidator has not been appointed:
    1. the sole general partner is adjudicated bankrupt or placed in liquidation:
      1. the sole general partner is incapacitated:
        1. any partner is unable to perform that person’s obligations under this Act or the partnership agreement:
          1. the conduct of any partner has prejudiced, or is likely to prejudicially affect, the business of the limited partnership or the carrying on of that business:
            1. material breach by any partner of the partnership agreement:
              1. conduct by any partner that, in the Court’s opinion, makes it reasonably impracticable for the other partners to carry on the business in partnership with that person:
                1. the limited partnership is unable to pay its debts:
                  1. in the opinion of the Court it is just and equitable that the limited partnership terminate.
                    1. the limited partnership, or 1 or more of its general partners, has intentionally provided the Registrar with inaccurate information:
                      1. the limited partnership, or 1 or more of its general partners, has failed to comply with duties relating to the company under this Act in a persistent or serious way.

                        1. In subsection (1)(c), a general partner is incapacitated if he or she is a person—

                        2. who is subject to a compulsory treatment order under the Mental Health (Compulsory Assessment and Treatment) Act 1992; or
                          1. who is subject to an order under section 10(1)(i) or 31 of the Protection of Personal and Property Rights Act 1988; or
                            1. whose property is managed by a trustee corporation under section 32 or 33 of the Protection of Personal and Property Rights Act 1988.

                              Notes
                              • Section 90(1)(j): inserted, on , by section 32 of the Limited Partnerships Amendment Act 2014 (2014 No 47).
                              • Section 90(1)(k): inserted, on , by section 32 of the Limited Partnerships Amendment Act 2014 (2014 No 47).