Jaden and Noel are starting a computer repair business together. Jaden insists on outlining rules for the departure of partners in the partnership agreement, although Noel does not think it is necessary. Which of the following statements might Jaden use to explain his insistence to Noel?
A)Provisions to remove a partner's ownership interest are necessary so the business would not have to liquidate.
B)Determining the allocation of profits to new, junior partners is important to eliminate future potential conflicts.
C)Responsibilities must be clearly delineated to avoid the possibility of one partner overstepping his or her bounds.
D)As the partnership matures and ages, defining how profits and losses will be distributed must be made.

Question

Quizplus · Accepted Answer

Jaden is concerned about the potential departure of a partner and how it will affect the business. By outlining provisions for the removal of a partner's ownership interest, the business can avoid having to liquidate and potentially losing valuable assets.

Jaden and Noel Are Starting a Computer Repair Business Together