Dissociation and Dissolution

Question 1

Events

Answer 1

Partner: gives express notice; happening of agreed event; expulsion ; bankruptcy; death or incapacity; appointment of receiver; termination of business entity

Question 2

Consequences

Answer 2

Partnership must purchase interest; if dissociation before expiration of partnership- liable to partnership for damages and not entitled to payout until the term expires unless he can establish there isn’t any damage to business from payout

Question 3

Dissociated Partner’s Power to Bind

Answer 3

Bound for 2 years if: act would have bound partnership before dissociation; and other party believed dissociated person was still a partner and didn’t have notice

Question 4

Dissociation Partner’s liability on others

Answer 4

2 years- same criteria as above

Dissociated partner can limit this by filing a notice of dissolution with the secretary of state- all persons are then deemed to have notice 90 days after filing

Question 5

Dissolution- winding up

Answer 5

RUPA: notice of withdrawal by 1 partner; expiration of a term; consent of all partners; within 90 days of death, bankruptcy, wrongful dissociation, at least 1/2 remaining partners wish to dissolve; unlawful event; judicial decree; economic purposes become frustrated; can’t practically be carried on

Question 6

Power to bind

Answer 6

bound for any acts appropriate for winding up- can file statement limiting liability

Question 7

Who may wind up

Answer 7

all living partners except wrongful dissociated partners

Partners may stop winding up at anytime before complete by unanimous vote

Question 8

Distribution of Assets

Answer 8

Order of payout: Creditors and partner’s accounts

Partners who pay more than their fair share- is entitled to contribution from other partners to equalize share