Dissolution occurs when the partnership terminates as whole.
Where a partnership is dissolved this normally results in a winding-up of its affairs. However, such a winding-up is not inevitable - for example, where a dissolution is as a result of a partner leaving (and assuming that the partnership agreement does not provide for the continuation of the partnership after he has left) the remaining partners can procure that the partnership continues, if they so wish.
The law provides for dissolution in certain scenarios, such as a unanimous decision to dissolve by the partners, expiry of a fixed term partnership, bankruptcy or death of a partner. However, it is common for a comprehensive partnership agreement to amend the circumstances in which the partnership dissolves and may provide for additional dissolution events.
Winding up of the partnership's business usually follows dissolution of the partnership. The assets of the partnership are sold, partnership debts paid off and any surplus distributed to the partners in accordance with their entitlement, as prescribed by the partnership agreement.
Insolvent partnerships must be wound up (as unregistered companies under insolvency legislation).