Does A General Partnership Terminate And Then Dissolve Or Dissolve And Then Terminate?
Tuesday, December 5, 2023

In a recent unpublished opinion*, the Court of Appeal considered the question of partnership termination under the California Revised Uniform Partnership Act. Wickline v. Schweder, 2023 WL 6155353 (Cal. Ct. App. Sept. 21, 2023).   The case involved an alleged partnership between two men, David Wickline and Ingo Schweder.  The trial court had found that the partnership had "terminated". The court bases this ruling on its findings that:

  • Between May 16, 2016, and August 2016, [Wickline's] and [Schweder's] conduct made it not reasonably practical for [Wickline] and [Schweder] to carry on the business of the partnership together;
  • [Wickline] hid the fact that he was withholding his skills and not performing all of his duties to the partnership, thereby breaching his fiduciary duty to [Schweder]; and
  • [Schweder] intended to terminate the partnership on May 20, 2016. 

Those are the reasons, they don't answer the question of what the trial court meant in finding the partnership to have been "terminated".  The Court of Appeal found that whatever the trial court meant, the partnership had not terminated because it had not dissolved and only after dissolution occurs does the possibility of a partnership termination arise.  In support the Court cited Section 16802(a) of the Corporations Code which states in part:  "The partnership is terminated when the winding up of its business is completed".  Perhaps a more accurate holding would be that only after dissolution and completion of winding up does the possibility of termination arise.  
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*For the rules governing citations to unpublished opinions, see Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115.

 

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