Frank Asked Matt to Join Him in a Business Venture

question 37

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) 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.
• B) 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.
• 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 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.
• E) 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.

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Definitions:

Unconscious Motives

Drives and desires that influence our behavior without our conscious awareness.

Interactionist

An approach or perspective in sociology and psychology that focuses on how individuals interact with each other and the environment in shaping behavior.

Traits And Genetics

The study of how certain characteristics and behaviors are inherited through genetic transmission from parents to offspring.

Projective Measure

A type of psychological test in which the subject's response to ambiguous stimuli reveals hidden emotions and internal conflicts.