Final answer:
The dissolution of a partnership when a partner leaves is known as Limited life. It is a key characteristic of partnerships, which differ from corporations that have an unlimited life.
Step-by-step explanation:
When a partner leaves a business, it often leads to the dissolution of the partnership. This characteristic is known as Limited life. In a partnership, each partner is responsible for the actions of the others, and the departure or death of a partner typically means that the partnership, as it was originally formed, no longer exists and is subject to change. It may require the addition of new partners or a complete reorganization. By contrast, mutual agency refers to the authority of each partner to bind the partnership to contracts and debts, limited liability pertains to partnership structures where partners are only responsible for their own investment in the company, and unlimited life applies to corporations where the entity continues irrespective of changes in ownership or management.
Partnerships are common in professions like law and medicine, and can either be general, with all partners equally responsible for the business, or limited, where some partners contribute financially without managing daily operations. General partnerships involve sharing profits and risks, while limited partnerships protect silent partners from liabilities beyond their financial contribution.