Disassociation Flashcards
A statement of dissociation (3)
(i) Constitutes a limit on the dissociated partner’s authority;
(ii) Gives third parties notice of the dissociation as of 90 days after the statement is filed; and
(iii) Reduces the window of partnership liability for a dissociated partner’s actions from two years to 90 days.
**filed with the state
Dissolution can be triggered by (3)
- By actions of partners
- By operation of law
- By judicial determination
A judicial expulsion of a partner by a court order may occur because the partner has either:
(i) engaged in misconduct that adversely and materially affected the partnership business;
(ii) willfully and persistently caused a material breach of the partnership agreement; or
(iii) breached a duty owed to the partnership or other partners.
What powers does a person winding up the partnership business have? (4)
- Dispose of and transfer partnership property
- Discharge partnership liabilities
- Preserve the business or property to maximize value
- Distribute assets to settle partners’ accounts
When a partner is dissociated and the partnership is not dissolved, the partnership must buy out that partner’s interest.
The dissociated partner’s interest is valued as if the partnership business was wound up on the date of dissociation. (The partnership is valued as the greater of the liquidation value of its assets or the value of the partnership as a going concern.)
What is a general partner’s accountability if he withdraws from a limited partnership in violation of the partnership agreement?
If a general partner withdraws from a limited partnership in violation of the partnership agreement, the general partner will be liable for damages caused by the breach of his agreement.
