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ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships

Dara and Ethan formed a partnership to carry out a single building project. The project has been completed. There is no agreement dealing with what happens next. Which statement is correct?

The partnership is automatically dissolved on completion of the building project. A partnership formed for a single undertaking ends when that undertaking is finished, unless the partners agreed otherwise. No notice and no court order is needed.

  1. AThe partnership continues until a partner serves notice of dissolution
  2. BThe partnership is automatically dissolved because the single venture has been completedCorrect
  3. CThe partnership can only be ended by a court order since it was formed for a specific purpose

Explanation

Where a partnership is entered into for a single venture or undertaking, it is dissolved on that undertaking ending, unless agreed otherwise. No notice is required, so the first option is wrong. A court order is only needed in specified circumstances such as disputes or incapacity, so the third option is wrong.

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