Which of the Following Is True About Successor's Liability for Predecessor's

question 68

Multiple Choice

Which of the following is true about successor's liability for predecessor's obligations?

• A)Once continuation begins after dissociation,the creditors remain the creditors of the predecessor.
• B)Partners may escape prior liabilities by forming new partnerships.
• C)There has to be an agreement with creditors to eliminate liability for prior obligations.
• D)The original partners are not liable for obligations incurred prior to dissociation.

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Definitions:

Excess Capacity

A situation where a company or economy can produce more goods or services than currently demanded, leading to unused resources or capacity.

Productive Capacity

The maximum output that an economy can produce without causing inflation, determined by the availability of factors of production.

Classical Economics

A theory that emphasizes the importance of free markets, competition, and self-regulation in the economy.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, indicating low unemployment.