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Dissolution, winding up, and

termination defi ned.

A partnership, of course, does not last forever. When it ends,


it involves these three separate stages.
The above terms are often confused. As they are used:
(1) Dissolution is the change in the relation of the partners
caused by any partner ceasing to be associated in the carrying
on of the business. (Art. 1828.) It is that point in time when the
partners cease to carry on the business together. It represents the
demise of a partnership. (68 C.J.S. 842.) Thus, any time a partner
leaves the business, the partnership is dissolved.
(2) Winding up is the actual process of settling the business
or partnership affairs after dissolution, involving the collection
and distribution of partnership assets, payment of debts, and
determination of the value of each partners interest in the
partnership. It is the final step after dissolution in the termination
of the partnership.
(3) Termination is that point in time when all partnership
affairs are completely wound up and fi nally settled. It signifies
the end of the partnership life. It takes place after both dissolution
and winding up have occurred.

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