Kay, Lei, and May formed a partnership to run a petrol station. The partnership agreement expressly stated that the partnership business was to be limited exclusively to the sale of petrol. They also agreed that Kay’s liability for debts would be limited to her capital contribution of £10,000. Question Which of the following is correct? A The partnership must be a limited partnership since the partners have agreed that Kay’s liability is to be limited to £10,000 B If Kay is sued by a customer for a debt owing of £60,000 she will only have to pay £10,000 C If Kay is sued by a customer for a debt owing of £60,000 she will only have to pay £20,000 D If Kay is sued by a customer for a debt owing of £60,000 she will have to pay £60,000 Question Lei entered into a £15,000 contract on behalf of the partnership to buy some used cars, which he hoped to sell from the garage forecourt. Which of the following is correct? A The partnership is not bound by this contract because it is contrary to the partnership agreement B The partnership is bound by this contract because it falls within Lei’s actual authority C The partnership is bound by this contract because it falls within Lei’s implied authority D The partnership is bound by this contract because it falls within Lei’s apparent authority Question May received £10,000 from the partnership’s bank drawn on its overdraft facility. She told the bank that the money was to finance a short-term partnership debt but in fact she used the money to pay for a round-the-world cruise. Which of the following is correct? A The partnership is not bound by this borrowing because May used the money for personal purposes B The partnership is bound by this borrowing because it falls within May’s actual authority C The partnership is bound by this borrowing because it falls within May’s implied authority D The partnership is bound by this borrowing because it falls within May’s apparent authority
Kay, Lei, and May formed a
expressly stated that the partnership business was to be limited exclusively to the sale of
petrol. They also agreed that Kay’s liability for debts would be limited to her capital
contribution of £10,000.
Question
Which of the following is correct?
A The partnership must be a limited partnership since the partners have agreed that Kay’s
liability is to be limited to £10,000
B If Kay is sued by a customer for a debt owing of £60,000 she will only have to pay £10,000
C If Kay is sued by a customer for a debt owing of £60,000 she will only have to pay £20,000
D If Kay is sued by a customer for a debt owing of £60,000 she will have to pay £60,000
Question
Lei entered into a £15,000 contract on behalf of the partnership to buy some used cars,
which he hoped to sell from the garage forecourt.
Which of the following is correct?
A The partnership is not bound by this contract because it is contrary to the partnership
agreement
B The partnership is bound by this contract because it falls within Lei’s actual authority
C The partnership is bound by this contract because it falls within Lei’s implied authority
D The partnership is bound by this contract because it falls within Lei’s apparent authority
Question
May received £10,000 from the partnership’s bank drawn on its overdraft facility. She told
the bank that the money was to finance a short-term partnership debt but in fact she used
the money to pay for a round-the-world cruise.
Which of the following is correct?
A The partnership is not bound by this borrowing because May used the money for personal
purposes
B The partnership is bound by this borrowing because it falls within May’s actual authority
C The partnership is bound by this borrowing because it falls within May’s implied authority
D The partnership is bound by this borrowing because it falls within May’s apparent
authority
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