Dissociation

Question 1

Apparent authority after dissociation

Answer 1

May continue for one year after dissociation (but partnership an protect itself by notifying creditors) or filing Statement of Dissociation (becomes effective after 90 days).

Question 2

Events requiring Dissolution

Answer 2

1. Partnership agreement requires it
2. Unlawful to continue
3. Judicial decree
4. If definite term or specific task (and term/task is completed).
   - or-
   i. Partner’s unanimously agree to wind up
   ii. Or at least half of partners agree to wind up w/i 90 days after death, incapacity, bankruptcy, or wrongful dissociation of a partner

Question 3

Distribution of assets after dissolution

Answer 3

1st - To creditors (including partners who are creditors)

2nd - Partners (their capital contribution + share of profits - share of losses)

Question 4

Not enough assets to cover liabilities

Answer 4

Pay creditors “Pro Rata”

(i.e. proportional to how much they gave. So if A gave twice as much as B, then A gets twice as much as B out of the assets).