Michael and Brian each invested $65 000 in a partnership where they agreed to share profits 40% Michael, 60% Brian. The partnership business was not successful and now has no assets. In addition they are being sued for $70 000 by a supplier for non- payment of invoices. What is the amount for which Michael could be held personally responsible if the lawsuit is successful? (Ignore any possible legal costs.)
A) Zero
B) $28 000
C) $65 000
D) $75 000

Question

Quizplus · Accepted Answer

In a partnership, partners are personally liable for the debts of the business. If the lawsuit is successful, Michael could be held personally responsible for the entire $70,000 debt, as partners have joint and several liability.

Michael and Brian Each Invested $65 000 in a Partnership