PARTNERSHIPS Flashcards
Jack has been a partner in a general partnership for ten years when he decides to take a sabbatical from work for a year to travel the world. Needing cash, Jack wants a distribution of the partnership profits before he sets off on his travels. He points out that the partnership, although it enjoyed record profits in the preceding calendar year primarily due to his efforts, did not distribute those profits among the partners. According to the partnership agreement, which is silent about the timing of distribution of the partnership’s profits, Jack’s share of the partnership profits is 10 percent.
Can Jack compel a distribution of 10 percent of partnership’s profits from the past year before his trip?
No, because a partner cannot compel a distribution of his share of the partnership’s profits if the partnership agreement is silent on the matter.
