Short answer. It does not end at dissolution. Under Article 1829, on dissolution the partnership is not terminated but continues until the winding up of partnership affairs is completed. Dissolution changes the partnership's purpose — it stops being a going concern and begins to wind down — but the firm keeps existing until the winding up is finished.
What the law says
On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.
Civil Code, Article 1829 — Partnership Continues Until Wound Up. Read the full provision →
Dissolution is not the end
Article 1829 corrects a common assumption. People often treat 'dissolution' as the death of a partnership, but the article is explicit: on dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed. Dissolution is better understood as a change of status than as an ending. It marks the point at which the partnership stops carrying on business as before and turns to settling its affairs. Until that settling — the winding up — is finished, the partnership continues to exist as a legal entity.
Three stages: dissolution, winding up, termination
It helps to see the three stages the law distinguishes. Dissolution is the change in the relation of the partners caused by a partner ceasing to be associated in carrying on the business — the trigger. Winding up is the process that follows: collecting the assets, paying the firm's debts, settling accounts among the partners and distributing whatever remains. Termination is the very end, reached only when winding up is complete. Article 1829 fixes the middle: between dissolution and termination the partnership persists precisely so that this work can be done.
What the partnership can still do
Because it survives, a dissolving partnership retains real capacity for the limited purpose of winding up. It can still hold and dispose of its property to convert it to cash, collect what is owed to it, and pay what it owes; it can sue and be sued on matters connected with its affairs; and the partners retain authority to do what is necessary to complete the winding up, though not to start new business. Existing obligations do not evaporate on dissolution — a creditor of the firm is still a creditor, and the firm's claims against others remain the firm's to pursue. What changes is the direction of the enterprise: from carrying on, to closing down in an orderly way.
Why it matters
For partners and those who deal with them, the practical point is that dissolution does not cut off rights and duties overnight. If your partnership is dissolving, the affairs still have to be wound up properly — debts paid, assets gathered and distributed, accounts settled — and the partnership continues to exist for exactly that. Do not assume that dissolution alone extinguishes a claim by or against the firm; it does not, until winding up is done. For a creditor, this means you can still look to a dissolved partnership that has not yet been wound up.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Estate of Edward Miller Grimm vs. Estate of Charles Parsons and Patrick C. Parsons, et al, G.R. No. 159810, October 9, 2006 — read the decision on LawPhil →