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Partnership dissolution asset distribution

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Partnership dissolution asset distribution

  • This topic has 5 replies, 2 voices, and was last updated 10 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • July 12, 2015 at 8:52 pm #260649
    Chloe
    Member
    • Topics: 95
    • Replies: 243
    • ☆☆☆

    Hi Mike

    I am also unfamiliar with this topic:

    Partnership dissolution asset distribution

    Please help?

    July 13, 2015 at 6:48 am #260662
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    All the liabilities must be paid off in full – there really are no rules because, if there aren’t enough partnership assets to pay the liabilities, the partners must dig into their own wallets and purses to put in extra money to pay the liabilities

    What else do you think that you are missing here?

    July 13, 2015 at 8:53 pm #260708
    Chloe
    Member
    • Topics: 95
    • Replies: 243
    • ☆☆☆

    They have to pay all of it off? Is this because they do not have limited liability?

    July 13, 2015 at 9:35 pm #260716
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    That’s correct. And each partner is 100% liable so if one partner declares him/herself bankrupt, the others take on that partner’s liability.

    If all the partners except one declare themselves bankrupt, the remaining solvent one has to pay 100% of the liabilities

    Ok?

    July 13, 2015 at 10:09 pm #260732
    Chloe
    Member
    • Topics: 95
    • Replies: 243
    • ☆☆☆

    Yes. It seems like risky business to me but I understand the logic.

    July 14, 2015 at 9:20 am #260746
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    It IS. A risky business – but that’s the price you pay for trading as a partnership and having multiply fewer rules and regulations to comply with.

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Viewing 6 posts - 1 through 6 (of 6 total)
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