Section Code: 1055 - 1063
Thai Civil and Commercial Code
PARTNERSHIPS AND COMPANIES
Part 4: Dissolution and Liquidation of Ordinary Partnerships
Section 1055. An Ordinary Partnership is Dissolved:
- In the cases, if any, provided by the contract of partnership.
- If made for a definite period of time, by the expiration of such period.
- If made for a single undertaking, by the termination of such undertaking.
- By any of the partners giving to the other partners due notice as provided by section 1056.
- By the death of any partner or by any partner becoming bankrupt or incapacitated.
Section 1056. 6 months’ Notice of Intent to Terminate Partnership
If a partnership is entered upon for any indefinite period, it can only be terminated by a partner at the end of a financial year of the partnership; and such partner must give at least six months’ notice of his intention to terminate.
Section 1057. Dissolution by Court Order
An ordinary partnership may also be dissolved by the Court on application by a partner in any of the following cases:
- When a partner, other than the partner suing wilfully or by gross negligence violates any essential obligation imposed upon him by the partnership contract.
- When the business of the partnership can only be carried on at a loss and there is no prospect of its fortunes being retrieved.
- When there is any other cause making the continuance of the partnership an impossibility.
Section 1058. Dissolution by Partnership Action
Upon the occurrence of any event connected with one partner which according to Section 1057 or Section 1067 entitles the remaining partners to demand the dissolution of the partnership, the Court may upon the application of the remaining partners instead of such dissolution order the expulsion of the partner in question.
For the purpose of the division of property between the partnership and the expelled partner, the partnership property must be assessed and valued at which it stood at the time when the application for the expulsion was first made.
Section 1059. Dissolution by Agreement Expiration
If at the expiration of the period agreed upon, the business of the partnership is continued by the partners or by such of them as habitually managed it during the said period, without any settlement or liquidation accounts, the partners are deemed to have agreed to continue the partnership for an indefinite period of time.
Section 1060. Purchase of Shares by other Partners
In any case under Section 1055, sub-section (4) or (5), if the subsisting partners buy the share of the partner whose membership has ceased, the contract of partnership continues between the subsisting partners.
Section 1061. Share Distribution After Dissolution of Partnership
After the dissolution of a partnership the liquidation shall take place, unless some other method of adjustment of property between the partners has been agreed upon or unless the partnership is adjudicated bankrupt.
If the dissolution is brought about by notice given by a creditor of one of the partners or by the bankruptcy of one of the partners, the liquidation can only be dispensed with the consent of the creditor or of the official receiver.
Liquidation shall be carried on by all the partners or by persons appointed by them.
The appointment of liquidators is decided by a majority of votes of the partners.
Section 1062. Order of Liquidation
The liquidation must be made in the following order:
- Performance of the obligation incurred towards third persons.
- Reimbursement of advances made and expenses incurred by the partners in managing the business of the partnership.
- Return of the contributions made by each partners.
The balance, if any, must be distributed as profit between the partners.
Section 1063. Division of Losses
If, after the performance of the obligations incurred towards third persons and reimbursement of advances and expenses, the assets are insufficient to return the whole amount of contributions to the partners, the deficiency constitutes a loss and must be divided as such.