MRL3701 - Study Unit 21 - Partnership and Sequestration Questions with Correct Answers

VOLUNTARY SURRENDER OF PARTNERSHIP ESTATE Correct Answer Application to surrender a partnership estate, must be brought by all the partners or their agents. However the following need not apply a. a partner not residing in the Republic b. a partner en commandite c. a special partner as defined in the Special Partnerships Limited Liability Act of 1861 SIMULTANEOUSLY WITH APPLICATION FOR SURRENDER OF PARTNERSHIP ESTATE Correct Answer Each partner must apply for the acceptance of the surrender of his private estate, except the partners mentioned above. PROPER PROCEDURE Correct Answer Give notice of intention to surrender both the partnership and the individual estates, and to prepare separate statements of affairs for each estate. Surrender of partnership and individual estate may be dealt with in single application. Court will not sequestrate a partner's private estate along with the partnership estate if he gives an undertaking to pay the partnership debts within a period fixed by the court and gives security for such payment to the satisfaction of the Registrar of the court. COMPULSORY SEQUESTRATION OF PARTNERSHIP ESTATE Correct Answer If court sequestrates the estate of a partnership it is bound at the same time to sequestrate the private estate of every member of the partners except the following: a. a partner not residing in the Republic b. a partner en commandite c. a special partner as defined in the Special Partnerships Limited Liability Act of 1861 As partnership itself never becomes an insolvent the simultaneous sequestration of the partners' estates is vital. Where private estate of a partner is unable to fully meet the costs of sequestration payable out of that estate, the balance must e paid out of the assets of the partnership. If insufficient assets in partnership estate, the estates of the individual partners need not make any contribution towards the costs of sequestration of the partnership estate.