By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Partnership Law Attorney
The Uniform Partnership Law establishes general rules governing the rights and duties of partners. This law applies to any agreement between two or more partners. Unless agreed upon otherwise all partners have equal rights relating to the conduct and management of the business. Additionally, no other individual can become a partner to the partnership unless ALL of the existing partners agree. For example, it is not enough that two out of three partners agree that person X should become a fourth partner – all three partners must consent that person X can become the fourth partner.
What happens if the partners want out? Then it must dissolve. Dissolution of a partnership is defined as “the change in the relation of the partners caused by any partner ceasing to be associated in carrying on the partnership business.” ‘Dissolution of the partnership’ is distinctly different from ‘termination of the partnership’ business because despite dissolution, the partnership still continues to tie up the loose ends of the partnership. Dissolution affects future transactions, but the past transactions are not affected.
There are different legal reasons sufficient enough to warrant a dissolution. Some of these reasons are willful breach of the partnership agreement. Willful breach of the partnership agreement occurs when a partner acts in a certain way which prevents another partner from performing his or her role in the partnership. Dissolution automatically occurs when one partner dies. It also happens when a partner expressly states he wishes the partnership to be over, even if there is a partnership agreement in place prohibiting such a thing from happening.
Dissolution of a partnership can be a difficult process, so contact an attorney who is versed and knowledgeable in NJ partnership law.
To discuss your New Jersey Partnerships matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing consultations if you are unable to come to our office.