Partnership dissolution asset distribution

This topic has 5 replies, 2 voices, and was last updated 10 years ago by MikeLittle.

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July 12, 2015 at 8:52 pm #260649
Chloe
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Hi Mike

I am also unfamiliar with this topic:

Partnership dissolution asset distribution

Please help?
July 13, 2015 at 6:48 am #260662
MikeLittle
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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
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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
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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
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Yes. It seems like risky business to me but I understand the logic.
July 14, 2015 at 9:20 am #260746
MikeLittle
Keymaster
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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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