What are the causes of dissolution of the partnership?

1. Without violating the agreement:

     a. Termination of the definite term or specific undertaking

     b. Express will of any partner in good faith, when there is no definite term and no specified undertaking

     c. Express will of all partners (except those who have assigned their interests or suffered them to be charged for their separate debts) either before or after the termination of any specified term or particular undertaking

     d. Expulsion of any partner in good faith of a member

2. Violation of the agreement

3. Unlawfulness of the business

4. Loss

     a. Specific thing promised as contribution is lost or perished before delivery

     b. Loss of a specific thing contributed before or after delivery, if only the use of such is contributed

Note: The partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquired the ownership thereof.

5. Death of any of the partners

6. Insolvency of any partner or of the partnership

7. Civil interdiction of any partner 8. By decree of court under Art. 1831, NCC

     a. a partner has been declared insane or of unsound mind

     b. a partner becomes in any other way incapable of performing his part of the partnership contract

     c. a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business

     d. a partner wilfully or persistently commits a breach of the partnership agreement

     e. the business of the partnership can only be carried on at a loss

     f. other circumstances render a dissolution equitable


What are the effects of dissolution of the Partnership?

1. Partnership is not terminated

2. Partnership continues for a limited purpose

3. Transaction of new business is prohibited (De Leon, Comments and Cases on Partnership, Agency, and Trust, p. 229, 2005 ed.)

Note: The dissolution of a partnership must not be understood in the absolute and strict sense so that at the termination of the object for which it was created the partnership is extinguished, pending the winding up of some incidents and obligations of the partnership, but in such case, the partnership will be reputed as existing until the juridical relations arising out of the contract are dissolved. (Testate of Motta v. Serra, G.R. No. L--22825, Feb. 14, 1925) Dissolution does not automatically result in the termination of the legal personality of the partnership, nor the relations of the partners among themselves who remain as co-partners until the partnership is terminated. (De Leon, Comments and Cases on Partnership, Agency, and Trust, p. 29, 2005 ed)