Concept Introduction:
Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.
Owner's authority and authorization:
A partnership works on the concept of Mutual Agency. As per Mutual agency concept, each partner is principal as well as the agent of another partner; they work for the benefit of partnership firm together. Each partner is the agent of the partnership business and has the ability to take decisions on behalf of the partnership and bound the partnership for the same.
The term "Mutual Agency" is used to define the relationship between the partners in a partnership firm. As per Mutual agency concept, each partner is principal as well as the agent of another partner; they work for the benefit of partnership firm together. Each partner is the agent of the partnership business and has the ability to take decisions on behalf of the partnership and bound the partnership for the same.
To discuss:
If partners can limit the right of a partner to commit their partnership to contract and the binding effect of such contracts on the partner's and on outsiders.
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Chapter 12 Solutions
Fundamental Accounting Principles
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