Question

Do you think it’s ethical for a general partnership to fire a partner by dissolving the partnership and then re-forming without the dismissed partner? Why or why not?

Answer 1

Answer:

The answer to this question is, it depends on the motive for the dissolution.

Explanation:

Partnerships can be very rewarding. Yet they are the most unstable of all the legal personalities which can be created for the purpose of for-profit operations or not-for-profit operations.

The dissolution of a partnership can happen for any of the following reasons:

• Bankruptcy
• Change in business practices  

• Death
• Partner negligence
• Poor cash flow and  
• Retirement

If a person maliciously deploys any of the scenarios as an excuse to dissolve the partnership, then it becomes unethical. This, of course is difficult to prove. A very unethical case would be to dissolve a partnership a partnership, make away with business secrets to start another. If this is discovered and can be proven, the aggrieved party may seek redress in the law court.

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