But there are different classes of creditors that determine in what order they are paid.
The percentage of the losses for which a partner is responsible depends on the partnership agreement.
For example, partner A may be responsible for 60 percent of a $10,000 debt.
The partners receive money from the liquidation of the business last, after the debts have been paid off.
The amount of money each partner receives after paying the company's debts depends on the amount left in his capital account.
Sometimes the sale of a company's assets doesn't provide enough money to pay off all the company's debts.
In such a case, the rest of the money comes from the capital accounts of each partner.The company's bookkeeping record includes a total of the amount in this account adjusted for distributions the partner received, additional investments, and the partner's share of company losses.The liquidation of a partnership starts with a review of the company's assets, including property and cash, and its debts.The assistance of legal and accounting professionals can help smooth this process.A liquidation marks the official ending of a partnership agreement.The partners then sell the company's assets, which can result in a gain or a loss.