Terminating a Partnership Flashcards
1
Q
How are Partnership Losses divided?
A
Generally, absent an agreement, partnership losses are divided equally among partners.
2
Q
What are the two steps to terminating a partnership?
A
1) Dissolution
2) Winding Up
3
Q
What happens during the **winding up* stage of termination?
A
Partnership assets are divided as follows:
1) Obligations to creditors (includng partners that are creditors to partnership)
2) Distributed to partners
If any debt remains, it is split equally by all partners
4
Q
Is a partner a creditor to the partnership by making contributions?
A
No, only if the partner makes some sort of loan to the contribution.
