Friday, February 1, 2008

Dissolving a Partnership in Indiana

How do you get out of a partnership? Dissolving the partnership is the first step.

Indiana's partnership statute defines dissolution at IC 23-4-1-29:

The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.
What causes a dissolution? IC 23-4-1-31 answers that question.
(1) Without violation of the agreement between the partners:
(a) By the termination of the definite term or particular undertaking specified in the agreement.
(b) By the express will of any partner when no definite term or particular undertaking is specified.
(c) By the express will of all the partners who have not 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) By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners.
(2) In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time.
(3) By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.
(4) By the death of any partner.
(5) By the bankruptcy of any partner or the partnership.
(6) By decree of court under section 32 of this chapter.
The second step is winding up the partnership and then termination of the partnership. I will follow up articles on those subjects.

From the stratosphere of business comes this story of a partnership breakdown, S&N’s brinkmanship pays off as Carlsberg blinks first