PRC-3 · Chapter 2 · Question 41 of 61
Ali, Bilal, and Chaudhry run a legal firm as a general partnership. Chaudhry decides to retire and withdraw his capital. In the absence of a prior continuation agreement, what happens legally?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The partnership is legally dissolved
Explanation
A general partnership does not have perpetual succession. If a partner leaves, dies, or goes bankrupt, the original partnership is legally dissolved.
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