A Partner Assigned His Partnership Interest to a Third Party

question 36

Multiple Choice

A partner assigned his partnership interest to a third party.Which statement best describes the legal ramifications to the assignee?

• A)The assignment of the partnership interest does not entitle the assignee to partnership assets upon a liquidation.
• B)The assignment dissolves the partnership.
• C)The assignee has the right to share in the management of the partnership.
• D)The assignee does not become a partner but has the right to share in future partnership profits and to receive the proper share of partnership assets upon liquidation.

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Definitions:

Post Incorporation Subscription

Agreements to purchase stock in a company made after the company has been incorporated.

Corporate Promoters

Individuals or companies that take the initiative in founding and organizing the business of a corporation, including arranging its incorporation and securing capital.

Organization Meeting

The initial meeting where the structure of a new organization is decided, officers are elected, and bylaws are adopted.

Preincorporation Contracts

Agreements made by the founding members of a corporation on its behalf before the company is formally incorporated.