Asked by kylah perry on May 29, 2024
Verified
Xavier,Yellie,and Zelda are partners of Koral Associates.The term of the partnership is 5 years,but Zelda withdraws after 1 year because she no longer wished to continue.Discuss the nature and consequences of Zelda's dissociation.
Dissociation
The process by which a member of a partnership or an entity withdraws or is removed from the entity, causing changes in the entity's structure or operations.
Partnership Term
The duration for which a partnership agreement is set to exist, which can be indefinite or fixed, as specified in the partnership agreement.
- Understand the entitlements and liabilities of partners upon dissociation, with emphasis on buyout operations and monetary compensation.
- Elaborate on the effects that a partner's disengagement or the introduction of a new partner has on liabilities and how a partnership operates.
Verified Answer
JD
Jordan DavisMay 31, 2024
Final Answer :
Zelda likely violated an express term of the partnership agreement without good cause.As such,Zelda wrongfully dissociated from the partnership.As a result of wrongful dissociation,Zelda is not entitled to demand wind up of the partnership.Xavier and Yellie may elect to continue to operate the partnership.Zelda is entitled to her share of the value of the partnership.However,Xavier and Yellie may seek a set off against Zelda's interest for any damages they incur for Zelda's breach of the agreement.
Learning Objectives
- Understand the entitlements and liabilities of partners upon dissociation, with emphasis on buyout operations and monetary compensation.
- Elaborate on the effects that a partner's disengagement or the introduction of a new partner has on liabilities and how a partnership operates.
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