Corporate Law
Termination and Liquidation of a General Partnership (Shirka Al-Tadamun): Principles and Practical Effects
This brief defines termination and liquidation for a general partnership (shirka al-tadamun) and summarizes the general and Jordanian-specific causes that lead to company extinction. It outlines procedural and financial effects of liquidation, the liquidator’s powers, the priority of creditors and the distribution of partners’ shares.
Updated: 11 July 2024
Prepared and reviewed by: Ashraf Al-Khawaja
Distinction between Termination and Liquidation
Termination is the legal event that dissolves the general partnership and ends its active existence as a juridical person; liquidation is the subsequent process of winding up the company’s affairs, collecting receivables, paying liabilities and converting assets for distribution. Practically, the company retains legal personality during liquidation to the extent necessary to complete those tasks, and its life ends once winding-up is complete or by an appropriate court order under Jordanian law.
Causes of Termination under Jordanian Law
Causes include the general grounds found in civil law (achievement of purpose, expiry of term, destruction of capital, judicial dissolution). The Jordanian Companies Law (Article 32) adds partnership-specific grounds: unanimous agreement to dissolve or merge, survival of a single partner, declaration of company bankruptcy, bankruptcy or interdiction of a partner unless the remaining partners agree to continue, judicial rescission of the partnership agreement, and striking off by the Companies Controller. The law also regulates special rules on death, withdrawal, or expulsion of a partner (Articles 28, 30, 33) and procedural limits such as the three‑month period to introduce a new partner in specified cases.
Methods of Liquidation, Appointment of the Liquidator and His Powers
After dissolution the company enters liquidation: voluntary (by partners’ agreement), compulsory (on the Companies Controller’s application if operations have stopped), or legal (when dissolution occurs by law or court order). The liquidator is appointed by the partners or by the court if no agreement is reached (Article 36); in compulsory winding-up the Controller files the appointment request. The liquidator must publish the liquidation, compile asset and liability schedules, collect receivables, pay obligations in statutory order, and is prohibited from disposing of company assets without partners’ consent or court authorization; he may only undertake new acts insofar as necessary to complete existing business.
Practical Effects and Final Responsibilities
During liquidation the company’s legal personality continues so creditors can be satisfied; management shifts to the liquidator and the authorized manager’s powers end. The liquidator must pay out in statutory order (liquidation costs and fees, employee claims, public treasury, third‑party creditors with priority, then loans by partners and partners’ shares), prepare a final account for the court, notify the Companies Controller and file the liquidation account within one year. The liquidator bears contractual liability to partners and tort liability to third parties for unlawful acts or breaches of mandate; courts resolve disputes over dissolution or continuation. If assets remain after deregistration, the matter is referred to the court to determine disposal under Article 40(b).
Legal notice
Notice: This is general educational content based on a published source and does not constitute legal advice. The original source is linked from this summary page; you should review the text of the Jordan Companies Law and the cited provisions (and any subsequent amendments or deadlines) and consult a licensed Jordanian lawyer to verify how the rules apply to any specific situation.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.