40. General Partnership: dissolution by notice

(1) Subject to any agreement between the partners, if a General Partnership was entered into for an undefined time and for no fixed venture or undertaking, the partnership may be dissolved by any partner giving Written notice to the others of the partner’s intention to dissolve the partnership.

(2) The General Partnership is dissolved on the date mentioned in the notice as the date of dissolution, or, if a date of dissolution is not mentioned, on the day, or the last of the days, the notice is given to the other partners.

41. General Partnership: dissolution by death or bankruptcy

(1) Subject to any agreement between the partners, a General Partnership is dissolved by the death or bankruptcy of any partner.

(2) The remaining partners must notify the Registrar of Companies of the death or bankruptcy.

42. General Partnership: dissolution by illegality

A General Partnership is dissolved by the happening of any event that makes it unlawful for the business, purpose or activity of the partnership to continue.

43. General Partnership: dissolution with consent of Registrar of Companies

(1) If a partner or 2 or more partners of a General Partnership wish to dissolve the partnership by agreement or other voluntary means, other than by an application to the Court under section 44 (General Partnership: dissolution by Court), the partner or partners may request the Registrar of Companies to consent to the dissolution of the partnership.

(2) The Registrar of Companies may give consent to the dissolution of the General Partnership if satisfied that there are no outstanding liabilities to creditors, and there will be no guarantees or other legal obligations on the partnership after its dissolution.

(3) The Registrar of Companies may, in the Registrar’s absolute discretion, refuse to consent to the dissolution of the General Partnership.

44. General Partnership: dissolution by Court

The Court may order the dissolution of a General Partnership, on the application of the Registrar of Companies or a partner, if:

• (a) a partner, other than the partner instituting the proceeding, is under a disability or is otherwise incapable of performing the partner’s part of the partnership agreement; or
• (b) a partner, other than the partner instituting the proceeding, has Contravened the law and, in the opinion of the Court, that partner will prejudicially affect the conduct of business in or from the AIFC; or
• (c) a partner, other than the partner instituting the proceeding:

(i) has wilfully or persistently Contravened the partnership agreement or any AIFC Regulations or AIFC Rules; or

(ii) has otherwise behaved in matters relating to the partnership business, purpose or activity in a way that it is not reasonable for the other partner or partners to conduct the business, purpose or activity in partnership with that partner; or

• (d) the business, purpose or activity of the General Partnership is being conducted at a loss; or
• (e) circumstances have arisen that, in the opinion of the Court, make it just and equitable that the partnership be dissolved; or
• (f) it is in the interests of the AIFC to make an order dissolving the partnership.

45. General Partnership: removal of partner

(1) On the application of a General Partnership or a partner of a General Partnership, the Court may order the removal of a partner in the circumstances that it considers appropriate.

(2) An order of the Court under subsection (1) does not dissolve the General Partnership.

46. General Partnership: outgoing partners

(1) The retirement, death, incapacity or removal of a partner of a General Partnership dissolves the partnership, unless the partnership agreement provides for the continuance of the partnership or the remaining partners elect to continue the partnership.

(2) If the General Partnership continues as provided for in subsection (1), the partners must provide the Registrar of Companies with a copy of an indemnity for the liabilities of the outgoing or deceased partner. If the partners do not provide the copy of the indemnity, the Registrar of Companies may refuse to allow the continuance of the General Partnership.

47. General Partnership: presumption of continuance of old terms

(1) If a General Partnership entered into for a defined time or a fixed venture or undertaking is continued after the time has ended or the venture or undertaking completed, and without any express new agreement, the rights and duties of the partners remain the same as they were at the end of that time or the completion of the venture or undertaking, so far as they are consistent with the terms of the partnership agreement.

(2) A continuance of the business, purpose or activity of the General Partnership by the partners, or such of them as regularly acted for the partnership, without any settlement or winding up of the partnership’s affairs, is presumed to be a continuance of the partnership.

48. Rights of assignee of share in General Partnership

(1) This section applies if:

• (a) a partner in a General Partnership assigns the partner’s share in the partnership, either absolutely or by way of mortgage or redeemable charge; and
• (b) the partner remains a partner after the assignment; and
• (c) the assignee’s interest in the partnership is only as assignee of the share.

(2) The assignment does not, as against the other partners, entitle the assignee, during the continuance of the partnership:

• (a) to interfere in the management or administration of the partnership’s business, purpose or activity; or
• (b) to require any accounts of the partnership’s transactions; or
• (c) to inspect the partnership’s Records or books.

(3) The assignee is entitled to receive the share of profits to which the assigning partner would otherwise be entitled, and the assignee must accept the accounts of profits agreed to by the General Partnership.

(4) The assignee is liable for the debts to which the assigning partner would otherwise be liable, and the assignee must accept the amount of the debt agreed to by the General Partnership.

(5) If the General Partnership is dissolved, whether in relation to all the partners or the assigning partner only, the assignee is entitled to receive the share of the partnership assets to which the assigning partner would otherwise be entitled.

49. Rights of Persons dealing with General Partnership

(1) If a Person continues to deal with a General Partnership after a change in its constitution or dissolution, the Person is entitled to treat all apparent members of the old General Partnership as still being members of the General Partnership until the Person has notice of the change or dissolution.

(2) Notice published in accordance with the Rules is sufficient notice of the change or dissolution.

50. Continuing authority of partners of General Partnership for winding up etc.

After the dissolution of a General Partnership, the authority of each partner to bind the partnership, and the other rights and obligations of the partners, continue despite the dissolution so far as necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise.

51. Rights of partners to application of General Partnership Property etc.

Unless otherwise agreed by all the partners of a General Partnership:

• (a) on the dissolution of the partnership, every partner is entitled to have:

(i) the General Partnership Property applied in payment of the debts and liabilities of the partnership; and

(ii) surplus assets, after payment of the debts and liabilities, applied in payment of what may be owing to the partners respectively after deducting what may be owing from them as partners to the partnership; and

• (b) any partner or the partner’s representatives may, on the dissolution of partnership, apply to the Court to wind up the partnership.

52. General Partnership: apportionment of premium on premature dissolution

If a partner pays a premium to another partner on entering into a General Partnership for a defined time, and the partnership is dissolved before the end of that time, the Court may, having regard to the terms of the partnership agreement and to the length of time of the partnership, make orders in relation to the premium or the part of it that it considers appropriate.

53. Rights if General Partnership is dissolved for fraud or misrepresentation

If the partnership agreement of a General Partnership is rescinded because of the fraud or misrepresentation of a party (the guilty party), the party rescinding the agreement (the rescinding party) is, without prejudice to any other right, entitled to:

• (a) a lien on, or right of retention of, the surplus of the General Partnership Property, after satisfying the partnership liabilities, for any amounts paid by the rescinding party for the purchase of a share in the partnership and for any capital contributed; and
• (b) stand in the place of the creditors of the partnership for any payments made by the rescinding party in relation to the partnership liabilities; and
• (c) be indemnified by the guilty party against any loss suffered by the rescinding party because of the wrong doing to the partnership.

54. General Partnership: right of outgoing partner to share profits

If a partner of a General Partnership has died or otherwise ceased to be a partner, and the surviving or continuing partners conduct the business, purpose or activity of the partnership with its capital or assets without any final settlement of accounts between the partnership and the outgoing partner (or that partner’s estate), then, in the absence of any agreement to the contrary, the outgoing partner (or that partner’s estate) is entitled to the share of the profits made since the dissolution of the partnership that the Court considers just in the circumstances.

55. General Partnership: outgoing partner’s share to be debt

Unless otherwise agreed by all the partners of a General Partnership, the amount owing from surviving or continuing partners to an outgoing partner (or the partner’s estate) in relation to the outgoing partner’s share is a debt accruing on the day of the partnership’s dissolution.

56. General Partnership: distribution of assets on dissolution

Unless otherwise agreed by all the partners of a General Partnership, the following provisions apply when settling accounts between the partners after the dissolution of the partnership:

• (a) losses, including losses and deficiencies of capital, must be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportion in which they were entitled to share profits;
• (b) the assets of the partnership, including the amounts (if any) contributed by the partners to make up losses or deficiencies of capital, must be applied in the following way and order:

(i) in paying the debts and liabilities of the partnership to Persons who are not partners;

(ii) in paying to each partner rateably what is owing from the partnership to the partner for advances as distinguished from capital;

(iii) in paying to each partner rateably what is owing from the partnership to the partner in relation to capital;

(iv) the ultimate residue (if any) must be divided among the partners in the proportion in which profits are divisible.

57. Insolvency of General Partnership: postponement of certain rights

If an amount has been advanced to a General Partnership by way of an unsecured loan or for the purchase of goodwill in consideration for a share of profits of the partnership, and the partnership becomes insolvent, the lender or buyer is not entitled to recover any amount until the claims of all other creditors have been satisfied.