Liquidating distribution partnership basis
As the regular English courts gradually recognized the societas, the business form eventually developed into the common-law partnership.
The UPA generally opted for the aggregate theory in which individual partners ("an association") comprised the partnership. 14.-The free and personal choice of the contracting parties is so essentially necessary to the constituting of a partnership, that even executors and representatives of deceased partners do not, in their representative capacity, succeed to the state and condition of partners; 2 Ves.
Under an aggregate theory, partners are co-owners of the business; the partnership is not a distinct legal entity.
Liquidation is the process of bringing a business to an end and distributing its assets to claimants.
Once the process is complete, the business is dissolved.
Internal Revenue Code Section 752 covers the treatment of liabilities for a partnership, while Section 465 covers the loss limitation rules related to amounts at-risk (limitations on deducting partnership losses).