Explain five circumstances under which a partnership may be dissolved. (10 marks)

Circumstances under which a partnership may be dissolved

1. Temporary partnership/(expiry of time / accomplishment of purpose / where the partnership was formed for a definite time /for a particular purpose) hence the expiry of time / accomplishment of purpose terminates the partnership
2. Mutual / voluntary agreement among partners / where the partners agree among themselves (to terminate the partnership), when they may have no alternative for whatever reason.
3. Bankruptcy! insanity of a partner where (a court declares) the value of one of the partner’s property insufficient to settle his or her debt. /due to loss of contractual capacity.
4. Change in law / government policy that makes the operation of the partnership illegal.
5. Permanent inability of a partner to perform / fulfill part of the partnership agreement either as a result of diseases / ill health / incapacitation.
6. Internal dissension /disagreement among partners / disagree irreconcilably then the partnership may be terminated.
7. Persistent losses in operation / where the business has continued to operate at a loss then it is terminated hence making it difficult to meet its financial obligations.
8. Court orders (where the partnership was formed under) due to fraud /mistake /misrepresentation /breach of law /partnership agreement court of law may order it dissolution.
   
9. Request by one /some partners to dissolve the partnership hence having to abide by their wish /granting their wish.
   
10. Withdrawal /admission of a partner which changes the status of the partnership.
    
11. Death of a partner which alters the composition of a partnership / which may necessitate a new agreement /arrangement.

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