The grounds upon which a partnership may be dissolved are typically set forth in a written partnership agreement. A partner may file an application in the courts to dissolve the partnership if the grounds for dissolution, as set forth in the partnership agreement, have been met.
In addition, the New Jersey Uniform Partnership Act permits any partner (even if there is no partnership agreement) to file an application in the courts to dissolve the partnership based on the following grounds:
- the economic purpose of the partnership is likely to be unreasonably frustrated;
- another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or
- it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement.
When presented with an application to dissolve a partnership, the court will evaluate the relevant circumstances and determine whether dissolution is appropriate and fair to all parties. In such instances, the courts have broad discretion to order the dissolution of the partnership or to fashion some alternative remedy (such as the appointment of a receiver).
Spector & Ehrenworth, P.C. has extensive experience advising partners with respect to filing and opposing applications to dissolve partnerships. If you are considering filing such an application (or if your partner has filed such an application), attorneys at the firm would be happy to discuss with you the specifics of your case and advise you with respect to your legal options. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail firstname.lastname@example.org.