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Ruling 2166*

In an exchange-based partnership, a period must be specified, and it is necessary that the partnership continue until the end of the period. If the partnership is a permission-based one, it is not necessary that a period be specified, and whenever one of the partners requests that the partnership capital be divided, the others must accept his request even if a period has been specified for the partnership unless dividing it would require some of the partners to spend money or it would result in a significant loss for the partners.

  • Commentary

    This ruling changed in March 2022. The previous version of the ruling was as follows:

    “In a permission-based partnership, whenever one of the partners requests that the partnership capital be divided, the others must accept his request even if a particular period has been fixed for the partnership, unless dividing it would require some of the partners to put in an amount or it would result in a significant loss for the partners.”