b. To what is Smith entitled with respect to (1) partnership profits, (2) inspection of partnership books, (3) an account of partnership transactions, and (4) participation in the partnership management?
| ♥ 0 |
Teresa, Peter, and Walker were partners under a written agreement made in January that the partnership should continue for ten years. During the same year, Walker, being indebted to Smith, sold and conveyed his interest in the partnership to Smith. Teresa and Peter paid Smith $50,000 as Walker’s share of the profits for that year but refused Smith permission to inspect the books or to come into the managing office of the partnership. Smith brings an action setting forth the above facts and asks for an account of partnership transactions and an order to inspect the books and to participate in the management of the partnership business. Teresa, Peter, and Walker were partners under a written agreement made in January that the partnership should continue for ten years. During the same year, Walker, being indebted to Smith, sold and conveyed his interest in the partnership to Smith. Teresa and Peter paid Smith $50,000 as Walker’s share of the profits for that year but refused Smith permission to inspect the books or to come into the managing office of the partnership. Smith brings an action setting forth the above facts and asks for an account of partnership transactions and an order to inspect the books and to participate in the management of the partnership business. |
Explanation
Section 503(a)(2) of RUPA is applicable in this case since Individual W makes the decision of transferring the interest of shares. According to Section 503(a)(2) of RUPA, Individual P and Individual T can dissociate from the firm by expelling Individual S. Dissociation does not necessarily lead to a dissolution of the partnership, which stands true in the given case.
Verified Answer
The actions of Individual W do not result in the dissolution of partnership since Individual has merely transferred their rights to Individual S, which is Individual W's right as a partner.
This conclusion can be made on the basis of Section 503(a)(2) of RUPA.
