ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
A limited partnership has one general partner, Ines, and one limited partner, Omar. Who has the authority to bind the limited partnership in the ordinary course of its business?
Ines, the general partner, has authority to bind the limited partnership in the ordinary course of business, because general partners manage the firm and act as its agents. Omar, as a passive limited partner, does not have this authority.
- AOnly Omar, as the investor
- BInes, as the general partnerCorrect
- CNeither, as a limited partnership has no agents
Explanation
The general partner manages the business and can bind the firm in the ordinary course. A limited partner who does not manage has no such authority and should not act for the firm. Option C is wrong since the general partner acts as agent.
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