Frank Asked Matt to Join Him in a Business Venture

question 219

Multiple Choice

Frank asked Matt to join him in a business venture.Matt has heard that partnership could result in some harsh consequences.Which of the following statements he has heard about the liability of partners is false?

• A) A partner is an agent for the firm and the other partner, and thus Matt would be liable for a contract made by Frank on behalf of the partnership if the partnership funds could not cover it.
• B) Matt could be liable for losses suffered by a client whose funds were misappropriated by Frank even if he (Matt) were not aware of the misappropriation and had no part in it.
• C) A partner is liable to the full extent of his personal fortune if an employee of the firm was negligent in the course of his duties and there were insufficient partnership funds to cover the resulting loss.
• D) A partner is not liable for any partnership debt that was incurred after he left as long as he gave notice in writing to his partner that he was retiring from the partnership.
• E) A partner has unlimited liability for any loss suffered by the partnership because of a negligent act by one of the partners if the partnership funds are insufficient to cover the loss.

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Definitions:

Organisms

Individual living entities that can carry out life processes independently.

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The hierarchy of complex biological structures and systems that define life, from atoms and molecules to cells, tissues, organs, organisms, populations, communities, and ecosystems.

Levels

Different stages, degrees, or magnitudes within a system, organization, or scientific classification.

Complex

Consisting of many different and connected parts, or a system that is not simple and may be difficult to understand.