p-ship - general partnership dissolution Flashcards
general partnership dissolution
key definitions
p-ship’s liability
priority of distribution
general partnership dissolution
key definitions
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.
general partnership dissolution
p-ship’s liability
old business
new business
general partnership dissolution
p-ship’s liability
Old business
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.
general partnership dissolution
p-ship’s liability
New business
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.
general partnership dissolution
priority of distribution
Each level of priority must be fully satisfied before beginning the next level.
- 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. - 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.
- Profits, if any, shared equally absent an AGR.
general partnership dissolution
priority of distribution
general rule
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.
