Dissolution before expiry of a fixed term
A partner who, on admission, pays a premium to the other partners with a stipulation that the firm will not be dissolved before the expiry of a certain term, will be entitled to a suitable refund of premium or of such part as may be reasonable, if the firm is dissolved before the term has expired.
No claim in this respect will arise if:
(1) the firm is dissolved due to the death of a partner;
(1) the dissolution is mainly due to the partner’s (claiming refund) own misconduct; and
(2) the dissolution is in pursuance of an agreement containing no provision for the return of the premium or any part of it.
The amount to be repaid will be such as is reasonable having regard to the terms upon which the admission was made and to the length of period agreed upon and that already expired. Any amount that becomes due will be borne by other partners in their profit- sharing ratio.
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