This case deals with a two persons, Person D and Person S opening up a Company L under partnership . After 7 years later with the help of a written agreement the partnership was dissolved. This news was printed in the local newspaper however no notice was given to companies which earlier credit extended to them in the earlier. On the basis of the agreement of dissolution, one of the partners decided to endure with the problem with the business. The problem here enquires one to determine if the closure of the partnership will release the proprietor of any liabilities left. To discuss: Whether the partnership dissolution relives Person D for personal liability of accounts.

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 31, Problem 19CP

Summary Introduction

Case summary:

This case deals with a two persons, Person D and Person S opening up a Company L under partnership. After 7 years later with the help of a written agreement the partnership was dissolved. This news was printed in the local newspaper however no notice was given to companies which earlier credit extended to them in the earlier. On the basis of the agreement of dissolution, one of the partners decided to endure with the problem with the business. The problem here enquires one to determine if the closure of the partnership will release the proprietor of any liabilities left.

To discuss: Whether the partnership dissolution relives Person D for personal liability of accounts.

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Anthony and Karen were partners doing business as the Petite Garment Company. Leroy owned a dye plant that did much of the processing for the company. Anthony and Karen decided to offer Leroy an interest in their company, in consideration for which Leroy would contribute his dye plant to the partnership. Leroy accepted the offer and was duly admitted as a partner. At the time he was admitted as a partner, Leroy did not know that the partnership was on the verge of insolvency. About three months after Leroy was admitted to the partnership, a textile firm obtained a judgment against the partnership in the amount of $50,000. This debt represented an unpaid balance that had existed before Leroy was admitted as a partner.The textile firm brought an action to subject the partnership property, including the dye plant, to the satisfaction of its judgment. The complaint also requested that, in the event the judgment was unsatisfied by sale of the partnership property, Leroy’s home be sold and…

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 31, Problem 19CP

Summary Introduction

Case summary:

This case deals with a two persons, Person D and Person S opening up a Company L under partnership. After 7 years later with the help of a written agreement the partnership was dissolved. This news was printed in the local newspaper however no notice was given to companies which earlier credit extended to them in the earlier. On the basis of the agreement of dissolution, one of the partners decided to endure with the problem with the business. The problem here enquires one to determine if the closure of the partnership will release the proprietor of any liabilities left.

To discuss: Whether the partnership dissolution relives Person D for personal liability of accounts.

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Answer 3

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 31, Problem 19CP

Summary Introduction

Case summary:

This case deals with a two persons, Person D and Person S opening up a Company L under partnership. After 7 years later with the help of a written agreement the partnership was dissolved. This news was printed in the local newspaper however no notice was given to companies which earlier credit extended to them in the earlier. On the basis of the agreement of dissolution, one of the partners decided to endure with the problem with the business. The problem here enquires one to determine if the closure of the partnership will release the proprietor of any liabilities left.

To discuss: Whether the partnership dissolution relives Person D for personal liability of accounts.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 31, Problem 19CP

Summary Introduction