Legal Updates

Restricting a partner from moving the Court to dissolve the partnership requires express consent or intention to do so

January 22, 2025
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25 of the 69 limited partners in an Israeli limited partnership that holds a string of rights in an income-producing property in Germany demanded the general partner to dissolve the partnership.  The limited partner objected, contending that the partnership agreement contains a closed list of cases in which the partnership may be dissolved.

The Court accepted the motion to dissolve the partnership.  Israeli law lists two main manners of dissolving a partnership: One, dissolution by notice of a partner and the other, dissolution by the Court.  Generally, partners are free to shape their relationship as they see fit, but due to the right of access to the Courts, restricting a partner from approaching the  Court must be expressly made in the agreement or indicated by clear circumstances that establish an intention to do so.  Here, the partnership agreement does not include an express restriction on the possibility of approaching to the Court with a motion for dissolution, and the words "only" are not sufficient to indicate an express intention of the parties to limit their right to do so.  Therefore, the motion for dissolution by the Court was granted.

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