Changes and Termination Flashcards
What is dissociation?
When a partner ceases to be associated with the partnership
Note: Can be voluntary or involuntary
How does voluntary dissociation work?
A partner may give notice to the partnership that they want to withdraw
What scenarios can constitute involuntary dissociation?
- Event triggered in the partnership agreement
- Expelled pursuant to the partnership agreement
- It’s unlawful for a partnership to carry on business with that partner
- Ordered by a court
- A partner goes bankrupt
- A partner dies
- A partner becomes incapacitated
- An entity dissolves
If a partner is dissociated, does the partnership dissolve?
Not necessarily
Once dissociated, does a former partner have rights to participate in the management of the partnership?
No
Once dissociated, does a former partner have any duties to the partnership?
No
After a partner dissociates, what must a partnership do if it continues?
Buy out the dissociated partner’s interest
In the event of wrongful dissociation, is the wrongfully dissociated partner liable for damages caused by the wrongful dissociation?
Yes
What are the two steps for termination of a partnership?
- Dissolution
- Winding up
What can dissolution of a partnership be brought by?
- By a partner
- By operation of law
What is a partnership at will?
An open-ended partnership with no fixed term tied to time period or undertaking?
Generally, when is a partnership at will dissolved?
When any partner chooses to dissociate
When might a partnership for a term or undertaking dissolve?
When the term expires or when the undertaking is complete
What three things can trigger dissolution of both types of partnerships?
- Event set forth in the partnership agreement
- Event that makes it unlawful to continue if not cured within 90 days
- Judicial determination
Who may wind up?
- Any partner that has not wrongfully dissociated
- A legal representative of the last surviving partner
