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Partnership Law Act 2019

Financial reporting, dissolution of partnership, and other miscellaneous provisions - End of partnership - Dissolving a partnership

77: Court may order repayment of premium if partnership prematurely dissolved

You could also call this:

"If a partnership ends early, you might get back some of the money you paid to join"

If you join a partnership for a set time and pay money to join, but the partnership ends early, you might be able to get some of that money back. This doesn't apply if the partnership ends because someone dies.

The court can decide if you should get some or all of your money back. When making this decision, the court will look at your partnership agreement and how long the partnership lasted.

However, you won't get your money back if the court thinks you were mostly responsible for ending the partnership early because of bad behaviour. You also won't get your money back if you and your partners agree to end the partnership and decide not to return any of the joining money.

Remember, this only applies to partnerships that were meant to last for a specific amount of time. If your partnership wasn't set up this way, these rules don't apply to you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206095.

Topics:
Business > Industry rules
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"How partnership money and property are used when a partnership ends"

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Part 4Financial reporting, dissolution of partnership, and other miscellaneous provisions
End of partnership: Dissolving a partnership

77Court may order repayment of premium if partnership prematurely dissolved

  1. This section applies if—

  2. one partner has paid a premium to another on entering into a partnership for a fixed term; and
    1. the partnership is dissolved before the end of that term (except if it is dissolved because of the death of a partner).

      1. The court may order the repayment of the premium or of a part of the premium that it thinks just.

      2. For the purposes of subsection (2), the court must have regard to—

      3. the terms of the partnership agreement; and
        1. the length of time that the partnership lasted.

          1. However, subsection (2) does not apply if—

          2. the dissolution of the partnership is, in the judgment of the court, entirely or mainly due to the misconduct of the partner who paid the premium; or
            1. the partnership is dissolved by an agreement that contains no provision for a return of any part of the premium.

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