Question

Graham is a partner in Johnson Associates, a partnership. The term of the partnership agreement is two years and the agreement does not include any clause on buyouts. After the term expires, Graham decides to dissociate and the remaining partners wish to continue. Under the RUPA:

a. the remaining partners must wind up and terminate the partnership.

b. they must buy out Graham's interest on Graham’s demand for payment.

c. they automatically must, within 90 days, pay in cash to the partner the partnership’s estimate of the buyout price, plus interest.

d. they can renew their partnership agreement.

Answer 1

The revised form of Uniform Partnership Act is called Revised Uniform Partnership Act(RUPA).

Dissociation generally doesnot cause dissolution or winding up. According to RUPA , the firm can continue their partnership ,within 90 days of an event co-occur dissociation, less than half the partners express their will to wind up. Simply means that within 90 days after the partner dissociate,if less than other partners agrees to wind up the firm(which means majority of the partnership doesnot agrees to wind up the firm) ,they can continue their business.  So, in this scenario if the firm wants to continue their business then they should purchase the dissociated partners interest.