Mutual Agency Implies That Each Partner in a Partnership Is

question 27

Multiple Choice

Mutual agency implies that each partner in a partnership is a fully authorized agent of the partnership. Which of the following statements is correct regarding the authority of a partner to bind the partnership in dealings with third parties?

• A) Only a partner with a majority interest in a partnership has the authority to represent the partnership to third parties.
• B) A partner has authority to deal with third parties on the behalf of the other partners only if he has written permission to do so.
• C) The partner's authority must be derived from the partnership agreement.
• D) The partner's authority may be effectively limited by a formal resolution of the other partners, even if third parties are not aware of that limitation.
• E) A partner may be able to legally bind the partnership to actions even if the other partners are unaware of his actions.

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Definitions:

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Devices that display images generated by computers or other electronic devices, such as monitors.

Severance Pay

Compensation granted to an employee upon termination of employment, often based on length of service.

Reasonable Notice

Adequate time or notification given in advance as required by law or contract, prior to taking an action.

Discretionary Bonuses

Additional pay awarded to employees at the employer's discretion, typically based on performance, profitability, or as a reward for exceptional work.