Which of the Following Is Correct with Respect to the Law

question 1

Multiple Choice

Which of the following is correct with respect to the law of partnership?

• A) Partners are only liable for the torts of their partners if they in fact knew that the wrongful conduct was taking place.
• B) A partnership cannot be created inadvertently.
• C) Partners have unlimited liability, meaning that they can lose up to the amount they have invested in the business.
• D) Each partner is vicariously liable for the wrongful acts of their partners committed in the course of the partnership business.
• E) Joint and several liability means that each partner can be sued several times.

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Definitions:

Limited Partner

An investor in a partnership who has limited liability to the extent of their investment in the business and does not participate in day-to-day management.

Limited Partnership

A business partnership where at least one partner has limited liability to the extent of their investment while at least one other has unlimited liability.

General Partners

Individuals in a partnership who are responsible for the management of the partnership and are liable for its debts.

Foreign Limited Partnerships

Partnerships formed in one jurisdiction but doing business in another where the liability of some partners is limited.