(1) Dissolution is caused:
(a) Without violation of the agreement between the partners:
(I) By the termination of the definite term or particular undertaking stated in the agreement;
(II) By the express will of any partner when no definite term or particular undertaking is stated;
(III) By the express will of all the partners who have not assigned their interests or allowed them to be charged for their separate debts either before or after the termination of any stated term or particular undertaking;
(IV) By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners;
(b) In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time;
(c) By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership;
(d) By the death of any partner;
(e) By the bankruptcy of any partner or the partnership;
(f) By decree of court under section 7-60-132.
Source: L. 31: p. 660, § 31. CSA: C. 123, § 31. CRS 53: § 104-1-31. C.R.S. 1963: § 104-1-31. L. 2003: (1)(a)(I) to (1)(a)(III) amended, p. 2236, § 112, effective July 1, 2004.
ANNOTATION
Law reviews. For article, "A Law Firm Pension Plan?", see 37 Dicta 351 (1960). For article, "Partnership Reorganization Under Chapter 11", see 12 Colo. Law. 1207 (1983).
A partnership is not dissolved by the failure on the part of one of its members in some respect to perform his duty or obligation to it, nor does such an individual thereby lose his right to come into a court of equity and have an accounting and settlement of the partnership affairs. Thompson v. McCormick, 149 Colo. 465, 370 P.2d 442 (1962).
Limited partnership dissolves without general partner. Since a limited partnership cannot exist without a general partner, a limited partnership dissolves when the limited partners are without their general partner. Skeen v. Harms, 10 B.R. 817 (Bankr. D. Colo. 1981).
During a specified term of existence or in the midst of a particular undertaking, a partnership may only be dissolved by a mutual agreement which settles the rights and obligations of the parties inter se or by judicial decree which determines such rights and obligations. Yoder v. Hooper, 695 P.2d 1182 (Colo. App. 1984), aff'd, 737 P.2d 852 (Colo. 1987); Tucker v. Ellbogen, 793 P.2d 592 (Colo. App. 1989).
Appointment of bankruptcy trustee dissolves partnership. A bankruptcy trustee cannot assume the position of general partner of a limited partnership where he is not the person with whom the limited partners contracted: thus, the partnership dissolves when the trustee is appointed. Skeen v. Harms, 10 B.R. 817 (Bankr. D. Colo. 1981).
As does debtor-in-possession. Where limited partners have not consented to the performance of a debtor-in-possession as their general partner, the limited partnership, having no general partner as of the day the debtor came into possession, ceases to exist, except for purposes of winding up. Skeen v. Harms, 10 B.R. 817 (Bankr. D. Colo. 1981).
Where partners organize a corporation to operate the business of the partnership and where partnership assets are transferred to the corporation, the partnership is dissolved. Hooper v. Yoder, 737 P.2d 852 (Colo. 1987); Tucker v. Ellbogen, 793 P.2d 592 (Colo. App. 1989).
Party not compelled to continue as partner. Under subsection (1)(a)(II), no party is compelled to continue as a partner when, by his express will, he chooses to withdraw. Wester & Co. v. Nestle, 669 P.2d 1046 (Colo. App. 1983).
Disposition of goodwill interest. On the occasion of the dissolution of a partnership, absent a contrary agreement, there is no obligation on either partner to buy the goodwill interest of the other partner, which remains as an undistributed asset of the dissolved partnership. Orzolek v. Forman, 670 P.2d 443 (Colo. App. 1983).
Applied in First Nat'l Bank v. District Court, 652 P.2d 613 (Colo. 1982).