Commentary

80 Effect of retirement on the partnership

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

80 Effect of retirement on the partnership

| Commentary

(g) Retirement, bankruptcy and death and expulsion

80 Effect of retirement on the partnership

Under the default code in the Partnership Act 1890, the retirement of a partner will lead to the dissolution of the partnership1. This is subject to contrary agreement and, as dissolution will usually be very inconvenient, it is customary to include a clause in the partnership agreement that in such a case the partnership will continue as regards the remaining partners.

In some cases, an outgoing partner will have the right to share in the profits made after his departure. This will only occur where the continuing partners

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