Kendra and Amelia operate an art gallery,owned as a partnership.Kendra disappeared.A few days later,Amelia learned that Kendra embezzled $75,000 of government grant money through the company.Is Amelia responsible for the $75,000?
A)Yes,because Amelia and Kendra are partners.
B)Yes,but only if Amelia was aware of the embezzlement.
C)No,because the embezzlement was done by Kendra.
D)Yes,but only to the extent of Amelia's investment into the partnership.
E)No,because partners are not responsible for the wrongful acts of other partners.

Question

Quizplus · Accepted Answer

A)The major disadvantage of partnerships is that partners are personally liable for
the firm's debts.If you are in a partnership with your best friend,who embezzles
$50,000 through the business,you will likely be held personally liable for that
$50,000.
B)The major disadvantage of partnerships is that partners are personally liable for the firm's debts.If you are in a partnership with your best friend,who embezzles
$50,000 through the business,you will likely be held personally liable for that
$50,000.

Kendra and Amelia Operate an Art Gallery,owned as a Partnership