DISSOLUTION OF PARTNERSHIP BUSINESS

LESSON NOTE FOR THE 1^ST WEEK

SUBJECT: FINANCIAL ACCOUNTING

TOPIC:      DISSOLUTION OF PARTNERSHIP BUSINESS

CLASS:     SS2

DATE:       15/5/2020

Specific Objectives: By the end of the lesson, the students should be able to:

1. Define Dissolution of partnership
2. List and explain the factors that can lead to the dissolution of partnership business

A. MEANING OF DISSOLUTION OF PARTNERSHIP BUSINESS

          Dissolution of partnership business means the disintegration or breakdown of partnership business. Once partnership business is started, one day the business must come to an end. The coming to an end of partnership business is what we regards as the dissolution of the partnership business.

Factors that can lead to the Dissolution of Partnership Business

          The following factors can lead to the dissolution of partnership business:

1. If entered into for a single adventure on the termination of that adventure:

Partners may enter into partnership business to buy a scarp motor vehicle at Eke Awka. After buying and selling it, the partners will share the profit arising from the sell of the scrap motor vehicles and the business will come to an end. When this occurs, the partnership business will come to an end.

2.  When one partner become lunatic:

Partnership business can be dissolved when one partner become lunatic; that is mad. If A and B are carrying on partnership business, and along the line “B” become made. The business will come to an end. This is because the partner had lost the soundness of mind.

3. The Bankruptcy of any one of the partner can lead to the dissolution of partnership business:

A partner is said to be bankrupt when the partner is unable to settle the debt he owe to the outsiders while carrying on the partnership business which will make the court to declare him or her bankrupt. If one partner becomes bankrupt, the business will come to an end as the bankruptcy of one of the partners may extend to the other partner.

4. If entered into for a  fixed term on the expiration of that term:

If partners entered into the partnership business for a period of time say six months to cultivate a piece of land. After cultivating the piece of land and selling the proceeds accruing from the land, the partnership will come to an end. When this occurs, the partnership business is said to be entered into for a fixed term nor dissolved. This is because the main reason of entering into business is to make profit. If the business is no longer profitable, the business will come to an end.

5. When one Partner Retires or Dies:

When one partner retires or dies there is disintegration or breakdown in the composition or numbers of the partners carrying on the business.

Therefore, there is need for the business to come to an end.

Evaluation: The teacher evaluates the students by asking them the following questions in order to know how far the specific objectives has been achieved.

1. Define dissolution of partnership business
2. State and explain the factors that leads to the dissolution of partnership business.

Assignment:

1. Define Deed of Partnership
2. What is company?

VISUAL VIDEO CLIP

LESSON NOTE FOR THE 2^ND WEEK

Click the file below  for second week note