Winding Up & Termination of the Partnership

Question 1

Upon dissolution, how long does the partnership continue?

Answer 1

the partnership continues until the winding up of partnership affairs is completed

Question 2

What is winding up?

Answer 2

winding up is the process of settling partnership affairs after dissolution

Question 3

When is the partnership terminated?

Answer 3

the partnership is terminated when the winding up of its business is completed

Question 4

What occurs to partnership assets during the winding up?

Answer 4

the partnership assets get converted to cash and then distributed upon the winding up

Question 5

In what order is the cash distributed?

Answer 5

-creditors receive partnership funds first
-partners’ capital contributions receive funds second
-profits distributed among the partners last

Question 6

What occurs if the partnership assets are insufficient to pay the liabilities of the partnership?

Answer 6

the partnership assets are insufficient to pay the liabilities of the partnership will the loss be divided among the partners

Question 7

PARTNERSHIPS APPROACH

Answer 7

1. Creation
2. Authority of partners
3. Rights – profits/losses, management and control,
4. Fiduciary Duty – duty of care, duty of loyalty
5. Dissolution