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Partnership Law Act 2019

Financial reporting, dissolution of partnership, and other miscellaneous provisions - End of partnership - How partnership may end

72: Court may dissolve partnership

You could also call this:

"A judge can break up a business team if things aren't working out"

You can ask a court to end a partnership for several reasons. The court might agree to do this if one of the partners can't think clearly anymore and can't manage their own affairs properly. They might also end the partnership if a partner can't do their part of the work anymore because of a permanent problem.

The court could also end the partnership if a partner is doing things that could harm the business. This could be by breaking the partnership agreement on purpose or doing things that make it too hard for the other partners to work with them.

If the business is only losing money, that's another reason the court might end the partnership. Finally, if there are any other situations that the court thinks make it fair to end the partnership, they can do that too.

To ask the court to end a partnership for these reasons, you need to make an application under section 73 of this law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206089.

Topics:
Business > Industry rules
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71: Partnership dissolved if unlawful, or

"Partnerships must end if they become against the law"

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"You can ask a court to end a partnership when there are problems"

Part 4Financial reporting, dissolution of partnership, and other miscellaneous provisions
End of partnership: How partnership may end

72Court may dissolve partnership

  1. The court may, on an application under section 73, declare a partnership to be dissolved if—

  2. a partner is a mentally impaired person who, in the opinion of the court, permanently lacks wholly or partly the competence to manage their own affairs; or
    1. a partner is in any other way permanently incapable of performing the partner’s part of the partnership agreement; or
      1. a partner is guilty of conduct that, in the opinion of the court after having regard to the nature of the business, is calculated to prejudicially affect the carrying on of the business; or
        1. a partner—
          1. wilfully or persistently breaches the partnership agreement; or
            1. otherwise acts in matters relating to the partnership business in such a manner that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with the partner; or
            2. the partnership business can be carried on only at a loss; or
              1. circumstances have arisen that, in the opinion of the court, make it just and equitable to dissolve the partnership.

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