p-ship - general partnership dissolution

Question 1

general partnership dissolution

Answer 1

key definitions
p-ship’s liability
priority of distribution

Question 2

general partnership dissolution

key definitions

Answer 2

dissolution: In the absence of an AGR that sets forth events of dissolution, a GP dissolves upon notice of express will of any general partner to dissociate.
termination: The real end of the p-ship.
winding up: The period between dissolution and termination in which the remaining partners liquidate the p-ship’s assets to satisfy the p-ship creditors.

Question 3

general partnership dissolution

p-ship’s liability

Answer 3

old business

new business

Question 4

general partnership dissolution
p-ship’s liability
Old business

Answer 4

Old business: The p-ship and therefore its individual partners retain liability on all transactions entered into to wind up old business by satisfying creditors who existed before winding up began.

Question 5

general partnership dissolution
p-ship’s liability
New business

Answer 5

New business: The p-ship and therefore its individual partners retain liability on brand new transactions during winding up until actual notice of dissolution is given to creditors OR until 90 days after filing a statement of dissolution w/the state.

Question 6

general partnership dissolution

priority of distribution

Answer 6

Each level of priority must be fully satisfied before beginning the next level.

1. P-ship must pay ALL creditors. These include
   1a. All outside, non-partner trade creditors AND
   1b. All partners who loaned money to the p-ship and thereby became creditors.
2. P-ship must repay all capital contributions paid into the p-ship by partners. The p-ship is now liable to its own partners for the full repayment of their capital contribution.
3. Profits, if any, shared equally absent an AGR.

Question 7

general partnership dissolution
priority of distribution
general rule

Answer 7

Each partner must be repaid his loans and capital contributions, plus any share of any profits or minus that partner’s share of any losses.