5. Dissociation Flashcards
What is required for dissociation?
At-will partnership
- Notice (express will to withdraw)
- Agreed event
- Valid expulsion
- Partner’s death/incapacity
- Court judgment
- Termination of partnership
Term partnership (wrongful dissociation)
- Before term expiration
- Before completion of specific purpose
- Partner’s bankruptcy
What is the difference between at-will partnership and term partnership?
At-will partnership
- Mutual termination
Term partnership
- Termination after end of term
When is a dissociating partner entitled to buyout?
Rightful dissociation
- At time of dissociation
Wrongful dissociation
- After term expiration
- After completion of specific purpose
- Offset vs damages due to partner’s dissociation
What is buyout?
Partner can dissociate by selling his shares to the partnership in return for profits (equal/by agreement)
What is required for the dissociating partner/partnership’s liability to third parties for dissociating partner’s act?
1) Act would have been bound before dissociation
2) TP reasonably believed dissociating partner was still in partnership + TP had NO knowledge of dissociation
How long is the dissociating partner/partnership liable to third parties?
2 years after dissociation
What is required for the dissociating partner/partnership removing liability to third parties?
Notice re dissociation to TP
Notice re dissociation to Secretary of State
- Deemed to have notice within 90 days
