Quiz 26: Partnerships
Partnership refers to the form of agreement between two or more persons who carry on a business for earning profit. The three essential elements of partnership are as follows: 1) Sharing losses and profits. 2) Jointly owning business. 3) Equal rights while governing business activities.
No , Mr C cannot hold Mr D liable as partner. There was no true partnership between Mr D and Mr R and hence no claim can be made under the theory of partnership by estoppel. Mr D never had any contract signed for partnership or sharing profit. The certificate presented by Mr R to Mr C was forgery and hence no partnership existed between the two. So no claim can be made against Mr D.
(1)The relationship between the members of the family was a partnership at will as there was no contract binding the people. It was not in written format but created through mutual consent and word of mouth. (2)Yes , Mr M had the authority to hire additional help. He was one of the partners of the business and hence he had the right to employ help for accomplishing his work when he went unfit for his work. But the payment would have to be made only from his share of the business. (3)Yes , Company A can make claim against any of the partners, the partnership as a whole, individual partners. The partnership agreement makes all the partners liable to its debtors individually and as a whole for the services or goods acquired by it. (4)No , If Mr M had provided the intent in notice to withdraw from the liability he will not be liable for further debt to Company A. He is disassociating himself from the firm and hence the dues occurring in future will not concern him. He will only be liable for the dues which occurred during his term as a partner.