ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Amara and Bilal start trading together as a business, sharing profits, but they never sign any written agreement or register anything. Which statement is correct?
A partnership can exist without any written agreement or registration. It arises where persons carry on a business in common with a view to profit, and this can be shown by their conduct, so Amara and Bilal are partners.
- ANo partnership exists because there is no written agreement
- BA partnership can exist because it may be formed by conduct and need not be in writingCorrect
- CA partnership exists only after it is registered with the companies registry
Explanation
A partnership is the relationship between persons carrying on a business in common with a view to profit. It can arise by oral agreement or by conduct. Writing and registration are not required, so the first option is wrong.
Did you get it right without looking?
One question tells you little. A timed set on Partnerships shows your real accuracy, how long you take and where you lose marks.
More Partnerships questions
- Jonas retired from a general partnership of three partners on 1 March. The firm's customers were not told, and the firm's letterhead still s…
- Lucia, Marco and Nadia are partners in a catering firm. Lucia commits a negligent act in the ordinary course of the firm's business, causing…
- Uma, Victor and Wen carry on business in partnership. After dissolution, Victor continues to use the firm's name and sells goods to a custom…
- Carla and Dev run a consultancy as a general partnership. Dev signs a contract for office equipment in the firm's name, within the usual sco…
- A partnership of Faisal, Grace and Hui has been dissolved and its assets are being realised. The assets raise 90,000 and the partnership owe…
- Priya and Quentin are partners. Quentin is declared bankrupt. The partnership agreement is silent on the effect of a partner's bankruptcy. W…