The Delaware Revised Uniform Limited Partnership Act (“DRULPA”) sets forth the standard to dissolve a limited partnership formed under Delaware law. 6 Del. C. § 17-101, et seq.
Under Section 17-801 of the DRULPA, a Delaware limited partnership will voluntarily dissolve upon the occurrence of certain events, including: (i) at a time specified in the limited partnership agreement; (ii) upon the happening of events specified in the limited partnership agreement; or (iii) the vote of at least two-thirds of limited partners (along with the affirmative vote of all general partners), unless otherwise provided in the agreement. 6 Del. C. § 17-801(a)(1)-(3).
Alternatively, a partner of a limited partnership has standing to petition the Delaware Court of Chancery to judicially dissolve the Delaware limited partnership. Under Section 17-802 of the DRULPA, “[o]n application by or for a partner the Court of Chancery may decree dissolution of a limited partnership whenever it is not reasonably practicable to carry on the business in conformity with the partnership agreement.” 6 Del. C. § 17-802.
Judicial dissolution of a Delaware limited partnership may be necessary when management is deadlocked, when the business is suffering irreparable harm and cannot operate, or when the business or its assets have been abandoned.
Carl D. Neff is a partner with the law firm of FisherBroyles, LLP, and practices in Delaware. You can reach Carl at (302) 482-4244 or at Carl.Neff@FisherBroyles.com.