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The dissolution of a partnership is the change in The purchase price of the interest sold to a new
relation of the partners caused by any partner ceasing partner may be:
to be associated in the carrying on as distinguished
Equal to the book value of the interest sold.
from the winding up of the business of the
partnership (Civil Code of the Philippines, Article Less than the book value of the interest sold.
1828) More than the book value of the interest sold.
INCORPORATION OF A PARTNERSHIP
A partnership may decide to incorporate after
evaluating the various advantages of having a
corporate form of business organization. After the
necessary adjusting and closing entries, the assets
and liabilities of the partnership are transferred to the
corporation in exchange for shares of stock. The
shares received by the partnership are distributed to
the partners based on their equity interests. In the
books of the corporation, the receipt of transferred
assets and liabilities will be recorded along with the
issuance of share capital to the incorporators, the
“former” partners.