Question

Chase, Marla, and Enrique have been operating a chain of self-service laundries as a general partnership for many years. Marla declares bankruptcy. In most states, Marla's bankruptcy will:
a. cause the partnership to declare bankruptcy.
b. cause Marla's dissociation from the partnership.
c. dissolve the partnership automatically.
d. do nothing to the partnership.

Answer 1

Answer:

b. cause Marla's dissociation from the partnership

Explanation:

In a partnership, there is an advantage among members to share the risks that might occur in the business. The law of business provides that if a partner is declared bankrupt, he/she will be force to leave the partnership and other members to carry on with it if they wish to. Therefore, among the three partners, if Marla is declared bankrupt, he will be forced to disassociate himself from the partnership. The correct answer is B.