| Commentary

23.7 Insolvency and partnership

| Commentary

23.7 Insolvency and partnership

In an agreement involving a degree of closeness and trust between the parties, such as a partnership agreement, it may be agreed that mere indebtedness at a certain level is to be sufficient cause for expulsion, for example:

‘If any partner shall be unable to pay, or have no reasonable prospect of paying, his debts the amount or aggregate amount of which equals or exceeds the bankruptcy level (within the meaning of the Insolvency Act 1986 Section 267), or shall enter into a compromise for the benefit of his creditors generally ...’

or, less severely:

‘If any partner

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