Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships

Ivan, Jelena and Karim run a general partnership. Karim leaves the partnership in March but no notice of his departure is given to customers or published. In May, a long-standing client, Lund Ltd, which dealt with the firm before March and has no knowledge of his departure, contracts with the firm through Ivan. Which statement is correct?

Karim remains liable. A retired partner continues to be liable to those who dealt with the firm before he left and who had no notice of the retirement, because they can rely on his apparent status. Lund Ltd had such dealings and no knowledge.

  1. AKarim remains liable on the May contract, because he did not give notice of his departure to those who dealt with the firmCorrect
  2. BKarim is not liable, because he ceased to be a partner in March
  3. CKarim is liable only if he received a profit share after March
  4. DKarim is liable only if he personally signed the contract

Explanation

A retired partner stays liable to persons who dealt with the firm before retirement and had no notice of it, since they may rely on his apparent status as partner. Lund Ltd dealt with the firm before March and was unaware, so Karim is liable. Actual retirement does not remove liability to such persons, and signing is not required.

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.

Practise PartnershipsFree diagnostic mock

More Partnerships questions