Can someone help me understand this.
Assignment occurs when there’s a 50% or greater change to a partnership structure. In this question, each answer choice involves the addition of new partners without losing any of the original partners. The best way to approach this question is to determine the ending number of partners and calculate percent change that represents the addition of the new partners. That probably sounds confusing, but let’s go through each answer choice.
A) 15 total partners at the end. 7 new partners added to the original set. 7 divided by 15 = 46.7% change
B) 9 total partners at the end. 4 new partners added to the original set. 4 divided by 9 = 44.4% change
C) 13 total partners at the end. 6 new partners added to the original set. 6 divided by 13 = 46.2% change
D) 9 total partners at the end. 5 new partners added to the original set. 5 divided by 9 = 55.6% change
Answer choice D is the only one that includes a 50% or greater change to the partnership structure. I recommend following this type of calculation when adding new partners to an existing set of partners.
I hope this helps!
Great answer! I want to tack another question onto the original question. I understand the math but I don’t understand the full picture. How does the term assignment as far as it’s meaning or phrase “assignment of a clients contracts” connects with and increase of partners in a partnership structure? I hope I’m making sense!
Can you give me a scenario?
The idea is basically just that the customer signed on with a specific team of people managing their assets. If that team materially changes then “assignment” occurs, and the customer needs to be notified and explicitly approve that they want their assets to continue being managed by the new team.
I got it. Big thanks.