A partnership continues in existence unless one of the following happens: 1) all assets are distributed to the partners in liquidation of the partnership, or 2) a majority of the partners vote to adopt a plan of liquidation of the partnership
a. True
b. False
Indicate whether the statement is true or false
False
RATIONALE: The partnership can terminate if the partnership redeems the interest of all partners (or all except for one partner), or if there is a "technical termination" of the partnership. A technical termination occurs when there is a sale or exchange of 50% or more of the capital and profits interests of the partnership within a 12-month period. In addition, a partnership will terminate if a partner acquires all of the other partnership interests and only one owner remains. A liquidating distribution of all assets would terminate a partnership, but adoption of a plan of liquidation would not.
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