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33.1 Law for Business, 15e by Ashcroft Chapter 33: Dissolution of a Partnership Law for Business, 15e, by Ashcroft, © 2005 West Legal Studies in Business, a Division of Thomson Learning
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33.2 Chapter 33 Objectives List the methods the partners may use to dissolve a partnership. Discuss the reasons why a court may order dissolution of a partnership. Identify those events that result in dissolution of a partnership by operation of the law. Explain who should be notified of a partnership dissolution.
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33.3 If no date for dissolution is fixed, the partners dissolve the agreement at any time. If one partner voluntarily withdraws, the business can continue, but the legal partnership itself is dissolved A partner be expelled by any activity the partners agree upon in the partnership agreement. Dissolution by Acts of the Parties
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33.4 Dissolution by Judicial Decisions Insanity of a partner Insanity must be by court decree. Incapacity If partner develops an incapacity that makes it impossible for the partner to perform in the partnership.
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33.5 Dissolution by Judicial Decisions Misconduct If one partner acts to the detriment of the company. Futility All partnerships must operate for a profit. If this clearly is not being met, the partnership must be dissolved.
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33.6 Dissolution by Operation of the Law Death Death of one partner dissolves partnership unless otherwise stated. Bankruptcy Unlimited liability of the partner is destroyed. Illegality If a partnership is formed legally then becomes illegal, it is dissolved.
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33.7 Notice of Dissolution To protect third parties, notice of dissolution must be given. Usually customers and creditors are notified by mail. Giving notice is not necessary when: Someone was once a partner. The partnership was dissolved by operation of the law. The partnership was dissolved by judicial decree. A dormant or secret partner retires.
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33.8 Distribution of Assets Partners who have advanced money are entitled to reimbursement Each partner is entitled to the return of contributed capital Remaining assets are distributed equally
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33.9 The End ! LAW
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