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ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships

Amara, Boris and Chen carry on business in a general partnership with no partnership agreement dealing with duration or termination. Boris gives notice that he is leaving the firm with immediate effect. Under the general law of partnership applicable to an at-will partnership, what is the usual effect of Boris's notice?

Notice by a partner in an at-will partnership normally dissolves the partnership, though the remaining partners can agree to continue the business. No court order is required and insolvency of all partners is not a precondition for dissolution.

  1. AThe partnership is dissolved, unless the remaining partners agree to continue the businessCorrect
  2. BThe notice has no effect until a court approves it
  3. CThe partnership continues automatically and Boris stays liable for all future debts
  4. DThe partnership is dissolved only if all partners are insolvent

Explanation

A partnership at will can be ended by any partner giving notice to the others. This normally dissolves the firm, although the remaining partners may agree to carry on as a new or continuing partnership. No court approval is needed, so the other options misstate the rule.

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