QUIZ #3 - DISSOLUTION OF PARTNERSHIP

TRUE OR FALSE. Write TRUE if the statement is True and write FALSE if the
statement is False.

1. On dissolution the partnership is not terminated, but continues until the winding
up of partnership affairs is completed.

2. The partnership is dissolved when a specific thing which a partner had promised
to contribute to the partnership is lost after its delivery to the partnership.

3. The dissolution of the partnership does not of itself discharge the existing liability
of any partner.

4. The partnership is bound by any act of a partner after dissolution where the
partner has become insolvent.

5. The individual property of a deceased partner shall be liable for all obligation of
the partnership incurred while he was a partner. but subject to the prior payment
of his separate debts.

6. The right to an account of his interest shall accrue to any partner, or his legal
representative.

7. Winding up is the point in time after all the partnership affairs have been wound
up.

8. Dissolution is caused by the express will of any partner, who must act in good
faith, when no definite term or particular is specified.
9. If it becomes apparent that the business of the partnership has become
unprofitable and can only be carried on at a loss, the partnership may be
dissolved.

10. As a rule, when a partnership is dissolved, any of the partners cannot bind the
partnership.

11. Where the dissolution is caused by the act, death or insolvency of a partner,
each partner is liable to his co-partners for his share of any liability created by
any partner acting for the partnership as if the partnership had not been
dissolved.

12. After dissolution, a partner cannot bind the partnership by any act appropriate for
winding up partnership affairs or completing transactions unfinished at
dissolution.

13. When dissolution is caused in contravention of the partnership agreement, the

partner who has not caused dissolution wrongfully has the right to be indemnified
for damages.

14. Where a partnership contract is rescinded on the ground of fraud or

misrepresentation of one of the parties thereto, the party entitled to rescind is
entitled to right of lien and right of subrogation.

15. Where a partner has become insolvent or his estate is insolvent, the claims
against his separate property shall be ranked and those owing to partnership
creditors shall be given first priority.