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Review Your SQE 1 Practice Records

Examination Timing: 00H00M28S

Mark and Susan, two entrepreneurs, decided to form a partnership to run a coffee shop. They did not create a formal partnership agreement. After two years, Susan wants to leave the partnership. Mark claims that Susan cannot leave without his permission. 


Which of the following statements best describes the legal position regarding Susan's ability to leave the partnership?

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In the absence of a formal partnership agreement, the provisions of the Partnership Act 1890 apply. Under this Act, a partner can dissolve the partnership by giving notice to the other partners, unless the partnership was entered into for a fixed term. Since there is no formal agreement specifying otherwise, Susan is free to leave the partnership at any time without Mark’s permission. 


Key Point: In the absence of a formal partnership agreement, the Partnership Act 1890 allows a partner to dissolve the partnership by giving notice to the other partners.

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