Legal Question in Business Law in California

Re: Dissolution of General Partnership

Dissolution events under the RUPA often depend upon the language of the partnership agreement. Many events that formerly triggered dissolution no longer do, at least not automatically.

With respect to the provision you cite, which is codified as Corporations Code section 16801(5) in California, I would interpret the provision to mean that dissolution must await the judicial determination applied for, and does not occur upon the making of the application. However, I believe a judge could, upon a proper showing, rule that dissolution actually occurred at an earlier date due to facts showing some triggering event.

Dissolution is the first step in a process that begins with an event causing dissolution and ordinarily ends with the winding up and termination of the partnership. The main legal impacts of a dissolution are upon the authority of partners to bind the partnership and their liability for subsequent partnership debts.

A partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up is complete. Corp. Code section 16802(a).

For authority of the person winding up a dissolved partnership, see Corp. Code 16803(c).

There is a form which may be filed with the Secretary of State (Form GP-4) which serves as notice of the dissolution and after 90 days relieves the (former) partners of new liability for partnership debts. See Corp. Code section 16805.

It looks to me as though one could fairly infer from Corp. Code 16806(b) that legitimate expenses of winding up, probably including reasonable attorney fees, would be chargeable to the partnership and hence deductible from any distributions made to the (former) partners.