Asked by Camryn Morrow on Jul 04, 2024
Verified
Carlita retires from Mortex Associates,a partnership.The business is continued by the remaining partners.What is Carlita's liability on debts incurred while she was a partner?
A) Carlita has liability to the extent of her capital contribution.
B) Carlita is fully liable.
C) Carlita has no liability.
D) Carlita has liability to the extent of partnership assets at the time of dissociation.
Retires
The act of leaving one's job and ceasing to work, typically due to reaching a certain age or for health reasons.
Liability on Debts
The legal responsibility to pay money owed to creditors, either by an individual or a company.
Capital Contribution
Funds or assets provided by investors or partners to a company or partnership to support its operations and growth.
- Familiarize yourself with the guidelines that control the obligations of dissociated partners for liabilities incurred while they were in partnership.
Verified Answer
ZK
Zybrea KnightJul 09, 2024
Final Answer :
B
Explanation :
Dissociated partners remain liable to partnership creditors for partnership liabilities incurred while they were partners;however,a dissociated partner's liability may be eliminated by the process of novation.
Learning Objectives
- Familiarize yourself with the guidelines that control the obligations of dissociated partners for liabilities incurred while they were in partnership.