It would depend entirely on what the distribution provisions of the partnership agreement provided.
If the distribution provisions provided that upon liquidation, the assets are to be distributed based on positive capital accounts, then the cash would be distributed to Linda's estate and Ray.
If the distribution provisions provided that all distributions, liquidation or not, are to be distributed first to Linda and Ray until Linda and Ray have received cumulative distributions equal to their contributions and then the balance to be split among all partners, then the cash would be distributed to Linda's estate and Ray.
If the distribution provisions simply provided that all distributions, liquidation or not, are to be distributed equally among the partners, then the cash would be distributed equally to all 3 partners...this would then result in Linda's estate and Ray then having a capital loss for their resulting positive capital account and Nancy would have phantom income for her resulting negative capital account balance.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
I'm sorry...The only thing in the box was the following:
Ray, Linda, and Nancy form a partnership. Ray and Linda contribute property and cash. Nancy contributes only services. Linda dies, and the partnership is liquidated. After all debts are paid, the surplus is not sufficient to pay back Linda's estate and Ray for the property and cash originally contributed by Linda and Ray. Nancy claims that the balance should be divided equally among Ray, Linda's estate, and Nancy. Is she correct?
2) Again, this depends on what the Partnership Agreement provides. If it requres consent for an assignment or that any assignment makes the recipient merely an "assignee" rather than a substituted partner, then the recipient would either not be entitled to receive the interest without consent, or would not be able to participate in management unless the other partners agreed to admit the recipient as a substituted partner. If the Agreement allows assignments and that the recipient would be admitted as "substituted partner" automatically, then Bartholomew would be correct.
3) The incorporation of the business required them to file Articles of Incorporation with the Secretary of State. The new business name would have been required to include something such as Inc., Corp., Corporation, etc. to indicate the limited liability status of the firm. As long as Amy and Paula either: i) changed all cards and stationary and invoices to show the new corporate name, or ii) if they did not, filed assumed name certificate with the Secretary of State and local county...then they would be protected. If they did neither, xxx would have a valid claim.
If you can provide the reference material, web site, etc that would be helpful because we have to cite our sources, thanks.
1) It's just basic partnership tax law under the Internal Revenue Code allocation and capital contribution provisions. 2) This is right out of the rules governing most state's partnership laws...the Uniform Partnership Code. 3) The last is out of each state's Code for Corporations. Each state's specific provisions are different.
That is about as specific as I can get. This site is basically set up to provide you basic answers to basic questions. It is not designed or priced to provide a fully researched and cited completed homework assignment. Furthermore, each question is supposed to be one question for one price. I've answered 3 questions for you.
I believe I have adequately answered your questions, and I would appreciate it if you would please click the GREEN ACCEPT button NOW, so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).