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:

Extemporaneous Presentation

a speech or presentation delivered without extensive pre-prepared script but often based on some notes or outline.

Extemporaneous Presentation

A speech or presentation delivered with little or no specific preparation, often structured around a brief set of notes or an outline.

Rehearse

The act of practicing a performance or activity ahead of time to ensure it is ready and polished.

Speaking Situation

A scenario in which an individual is required to speak in front of an audience, often to inform, persuade, or entertain.