A partnership may be involved in "Dissociation" or "Dissolution."Required:Describe "Dissociation" and "Dissolution."
What will be an ideal response?
Dissociation is the legal description of the withdrawal of a partner including the following:
i. Partner's death.
ii. Partner's voluntary withdrawal, i.e. retirement.
iii. Judicial determination.
Not all dissociations result in a partnership's liquidation. Many partner dissociations involve only a buyout of the withdrawing partner's interest rather than a winding up and liquidation of the partnership's business.
Dissolution involves dissolving of the partnership and winding up of the partnership business.
Dissolutions can occur:
i. In a partnership at will. A partnership agreement can avoid this situation.
ii. In a partnership for a definite term or specific undertaking.
iii. By an event that makes it unlawful to carry on the partnership business.
iv. By a judicial determination.
A "Dissociation" that results in liquidation has the same end result as "Dissolution."
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