Final answer:
Yes, a partnership can be dissolved without being liquidated. Dissolution ends the partnership while the business may continue to operate, potentially under a new structure or partnership agreement.
Step-by-step explanation:
The answer is true. A partnership can indeed be dissolved without necessarily going through liquidation. This means that while the partnership as a legal and business entity may come to an end, the actual business does not necessarily need to cease operations or dispose of its assets.
For instance, if a partner leaves or passes away, this can trigger a dissolution of the partnership, but it does not automatically mean that the business must liquidate. Instead, the remaining partners may decide to restructure the business or form a new partnership arrangement.
However, it is important to note the main disadvantages of a partnership, such as shared liability among partners for each other's actions and debts, and the limited life of the partnership based on the comings and goings of partners. These factors can significantly impact what happens following the dissolution of a partnership.
Additionally, the terms of dissolution are often detailed in a partnership agreement, which can outline procedures for handling the departure of a partner and the continuation of the business. In the absence of such an agreement, local business laws will typically provide a default process for dissolution and potential liquidation.