Return of premium on premature dissolution of Firm

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Return of premium on premature dissolution of Firm

Unread postby Admin » Thu Jan 24, 2013 1:56 pm

Return of premium on premature dissolution:
Where a partner has paid a premium on entering into partnership for a fixed term, and the firm is dissolved before the expiration of that term otherwise than by the death of a partner, he shall be entitled to repayment of the premium or of such part thereof as may be reasonable, regard being had to the terms upon which he became a partner and to the length of time during which he was a partner, unless -
(a) the dissolution is mainly due to his own misconduct, or
(b) the dissolution is in pursuance of an agreement containing no provision for the return of the premium or any part of it.
Illustration.-
(1) A and B entered into partnership as solicitors for a term of seven years, A paying a premium of Pound 8001- to B, who, before entering into the partnership, knew that A was inexperienced and incompetent. After the expiration of two years, B complained that A's incompetence was injurious to the business, and called upon him to dissolve the partnership. A= thereupon files a suit praying for a dissolution and for a return of a proportionate part of the premium. A is entitled to the return of a part of premium proportionate to the un-expired portion of the term:
(2) A and B become partner for ten years. A paying B a premium of pound 1000. A quarrel occurs at !he end of the eight years, both parties being in wrong, and a dissolution is decreed. A is entitled to a return of pound 200 of the premium from B.
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