KOLEJ
PROFESSIONAL MARA AYER MOLEK
COMPANY LAW (LAW2513)
TUTORIAL 5 – Dissolution of
Partnership
SECTION A
1.
Daffy is one of the partners in the
Razlan’s legal firm. He was entrusted with a client’s money and has used the
money for his own personal needs. Daffy’s bad behavior will affect the
credibility of the firm.
With regard to the above situation,
the court may order the firm to be dissolved based on the ground of:
A. persistent breaches
B. just
and equitable
C. permanent
incapacity
m D. prejudicial
conduct to the business
2. Afifah and Nabila agree to set up a
partnership business for selling flowers during KPM’s Convocation Fair in
September 2010. The partnership between them is dissolved when
A. the
convocation is over
B. a
partner continues after the expiry of period
C. any
one of them give notice to the other partner
D. the
period that they have agreed upon has expired
3.
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Kaktum Partners carried on a food
and beverage (drink) business. One of the drinks produced by Kaktum Partners
is a drink made from “Daun Ketum”. Suddenly, government come out with
a new law that “Daun Ketum” is considered as illegal drugs and those
who were involved in selling, buying and producing any products made from “Daun
Ketum” can be charged with crime according to Dangerous Drugs Act 1952.
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What is the legal implication as
regards to the above situation?
A.
Kaktum Partners was dissolved as
soon as the new law with regards to “Daun Ketum” was come out.
B.
Kaktum Partners may continue the
selling, buying and producing products made from “Daun Ketum”.
C.
Kaktum Partners was not liable for
the selling, buying and producing products made from “Daun Ketum”.
D.
Kaktum Partners was dissolved as the
business of the partnership can only be carried on at a loss.
4. The
partnership business was carried out between Malaysia
and Singapore Singapore declares war on Malaysia
A.
notice
B.
supervening illegality
C.
expiration or automatic dissolution
D.
bankruptcy or charge on partner’s
share
5. Which of the following are the grounds of
dissolution of partnership without the
order of court?
A.
When
a partner is found to be permanently unsound mind.
B.
When
a partner becomes permanently incapable of performing his part of the partnership contract.
C.
By
the death or bankruptcy of any partner.
D.
When
the business of the partnership can only be carried on at a loss.
6. The
relationship of the partners had come to standstill. They only communicate
through the secretary of the firm.
The above statement may allow partners to apply to the court
for dissolution of partnership on the ground of _______.
A.
mental disorder.
B.
just and equitable.
C.
conduct prejudicial to business.
D.
being carried on at a loss.
7.
What are the circumstances where a
partnership can be automatically dissolved?
I.
By notice.
II.
By order of court.
III.
By expiration of term agreed for the
partnership.
IV.
On completion of the business if it
is for a single adventure.
A.
I and II.
B.
I and III.
C.
III and IV.
D.
II, III and IV.
8. The following are the modes of
dissolution of partnership without court intervention except
A.
Upon the completion of a single project
B.
By giving notice to dissolve the partnership to the
other partners
C.
Upon the happening of an event that is just an
equitable to dissolve the partnership
D.
Upon the happening of an event that may cause the
partnership to become illegal
9. The following
are the reasons for the court to grant an order of dissolution of the
partnership except
A. Expiration of a fixed term
B.
Willful and persistent breach of the
partnership agreement by a partner
C.
No opportunity of making profit
D.
A partner becomes permanently of
unsound mind
SECTION B
Question 1
Loh and Samy
are partners in car workshop known as Speed Engineering. They agree to run the
business together for 5 years. They employs 2 other mechanics and Loh is acting
as the head of mechanics.
3 months after
the business operates, Loh met with an accident at the workshop. Two of his
left fingers stuck in an air-conditioner fan and was cut off. The doctor at the
hospital manage to attached the fingers but after 3 months, Loh still unable to
use his left hand.
Samy, as
partners wish to dissolve the partnership business. It is because in his
opinion, the business is going to fail without Loh. Samy was thinking of making
an application to court for dissolution order.
Advise Samy as
to the ground that he may use in his application to court.
[15 marks]
Question 2
Firm P-Vires Enterprise consists of
three partners namely villa, Torres and Puyol. Being an accounting firm, the
three partners have yet to execute a partnership agreement. Clause 31 of their
partnership agreement provides:
Clause 31: “Bankruptcy
of any partner shall not affect this partnership. This partnership shall
continue even on bankruptcy of any partner.”
Lately villa has been coming in late
for work as his private life is drawing a lot of negative attention from the
press. He has been charged with drunk driving and was seen slapping his
girlfriend. Torres has been declared bankrupt last week. Puyol, in the meantime
has been undergoing treatment for mental problems. Discuss the possibility of a
dissolution of the partnership of P-Vires Enterprise.
[15 marks]
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