chapter 16 - proprietorship & partnership Flashcards
joint and several liability
where partners individually and as a group have liability for a debt of the partnership
the persons who form a partnership are collectively called…
the firm
if an act carried out by a partner in a partnership is not something that falls within the ordinary scope of partnership business, who is liable?
only that partner
if an act carried out by a partner in a partnership falls within the ordinary scope of partnership business, who is liable?
every partner in the partnership
who in a partnership can bind the firm in contract with third parties?
every partner, unless the person with whom the partner was dealing knew that he or she had no authority to do so
can a firm be liable for a tort committed by a partner?
yes, if the tort is committed in the ordinary course of partnership business
is a new partner liable for the existing debts of the partnership?
no, under the Partnerships Act, a new partner is not liable for any debts incurred before the person becomes a partner. however, new partner may, if they want, agree to assume existing debts as a partner, by express agreement with the previous partners
is a retiring partner relieved of all debts incurred while a partner?
no, but if proper notice of retirement is given to all persons who had previous dealings with the firm (and to the public at large), the retiring partner would not be liable for partnership debts incurred after the date of retirement
only method that a majority may use if they want to get rid of a partner without an express agreement
terminate the partnership, then form a new partnership without the partner. certain disadvantages, but is the only procedure available to the partners if they have failed to make express provisions for the elimination of undesirable partners in an agreement
