What is the preferred method of resolving a partner's deficit balance, according to the Uniform Partnership Act? O Partners never have a deficit balance.
Please help solve
According to the Uniform Partnership Act (UPA), which is a model law that governs partnerships in the United States, the preferred method of resolving a partner's deficit balance is for the partner to contribute personal assets to cover the deficit balance. This means that the partner who has the deficit balance in their capital account would be responsible for contributing personal funds to the partnership to cover the shortfall.
Under the UPA, partners are jointly and severally liable for the obligations of the partnership, including any deficit balances in their capital accounts. This means that if one partner is unable to contribute the necessary funds to cover their deficit balance, the other partners may be required to make up the difference.
Step by step
Solved in 2 steps
