Question

In the ordinary course of business, if all partners are liable jointly and severally, what happens to the partners' assets if the partnership assets are not sufficient to cover the liabilities?

1) The partners' personal assets are liable for the remaining liabilities
2) The partners' personal assets are not liable for the remaining liabilities
3) The partnership assets are distributed among the partners
4) The partnership assets are liquidated and used to pay off the liabilities

Answer 1

In the ordinary course of business, if all partners are liable jointly and severally, the partners' personal assets are liable for the remaining liabilities if the partnership assets are not sufficient to cover them. When the partnership assets are not enough to pay off the liabilities, the partners will have to use their personal assets to cover the remaining debts. In this scenario, the partnership assets are liquidated and used to pay off the liabilities.

Step-by-step explanation:

In the ordinary course of business, if all partners are liable jointly and severally, the partners' personal assets are liable for the remaining liabilities if the partnership assets are not sufficient to cover them.

When the partnership assets are not enough to pay off the liabilities, the partners will have to use their personal assets to cover the remaining debts.

In this scenario, the partnership assets are liquidated and used to pay off the liabilities.