Partnerships

Question 1

Partnership

Answer 1

A partnership is formed when two or more people associate to carry on, as co-owners, a business for profit. A person who receives profits of a business is presumed to be a partner. A partner is an agent of the partnership for the purpose of its business. A partnership can be bound on a contract if the partner had actual or apparent authority.

Question 2

Apparent authoirty

Answer 2

Apparent authority arises when a partner acts in the ordinary course of the partnership business or business of the kind carried on by the partnership. The act will bind the partnership unless the partner had no actual authority and the third party knew the partner lacked authority.

Question 3

Actual authority

Answer 3

Authority the partner reasonably bleives he has based on communications with the partnership. express contract or implied conduct (custom, necessity, acquiescence).

Question 4

Transactions outside the ordinary course of business require ______ of the partners

Answer 4

Transactions outside the ordinary coruse of business require unanimous consent of the partners.

Question 5

Are individual partners personally liable for contracts?

Answer 5

Each partner is jointly and severably liable for their partnership obligation. When a partner enters into a contract without authority, however, the partnership is not bound.