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Analyzing a Partnership in Business

Raju and Kamala set up a consultancy firm under the name of Expert Consultancy in June 2000. The partnership agreement clearly stated that the partnership shall remain for ten years period. In December 2010, Kamala took a personal loan amounting to RM100,000 from Bank Business, but failed to pay three installments. Kamala later assigned her interest in the firm to Bank Business. Raju was not happy with the assignment and gave a notice to Kamala for dissolution of the firm. Raju decided that if Kamala refused to accept the notice, he would apply for dissolution by a court order. Discuss:

a) The right of Kamala to assign her interest in Expert Consultancy to Bank Business.

b) What are the grounds that Raju could use to apply for dissolution of partnership by way of court's order?

Solution Preview

a) Kamala had no right to assign her interest in the Expert Consultancy due to the fact that the personal loan was granted for personal purposes and not for the purposes of Expert Consultancy. If this money was to be used for the business development of the firm, the loan should have been assigned to the firm itself, and not to the individual. There is no proof that Kamala used this money for anything ...

Solution Summary

The expert analyzes a partnership in businesses. The grounds that Raju could use to apply for dissolution of partnership by way of court's order are determined.

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