6. Dissolution

Question 1

Dissolution

Answer 1

The process of ending the partnership as an entity, shifting its purpose from conducting business to ending the business.

Question 2

What is required for dissolution?

Answer 2

Unanimous vote

Rightful dissociation

Wrongful dissociation + majority vote

Partner’s death

Agreed event

Illegal conduct

Judicial decree issuance

Question 3

What is required for waiving dissolution?

Answer 3

Unanimous vote to continue partnership

• Within 90 days of dissolution announcement
• Non-dissociating partners

Question 4

Are partners entitled to buyout after dissolution?

Answer 4

No

Question 5

Winding Up

Answer 5

The post-dissolution process in which the partners complete any remaining partnership business, collect on debts, pay creditors, and distribute any remaining assets to the partners.

Question 6

What are (dissociated/non-dissociated) partners/partnership liable for to TPs?

Answer 6

Liabilities incurred during winding-up

- Joint and several liability

Question 7

What is the dissociating partner liable to partnership for?

Answer 7

Breach of fiduciary duties until winding-up

Question 8

Who may engage in winding-up?

Answer 8

Living partners

Rightfully dissociated partners
- NOT wrongfully

Question 9

How may partnership’s assets be distributed?

Answer 9

Convert assets into cash

Distribute to:

1) Creditors
2) Partners (profits/losses)

Question 10

What is required for the partners/partnership removing liability to third parties?

Answer 10

Notice re dissociation to TP

Notice re dissociation to Secretary of State
- Deemed to have notice within 90 days