ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Kofi and Lena are partners with no agreement on how decisions are made. Kofi wants to change the nature of the business from retail to wholesale. Lena objects. Which statement is correct under the default rules?
The change needs the consent of all partners, so Lena's objection stops it. By default, ordinary decisions are made by majority, but altering the nature of the partnership business requires unanimity.
- AKofi may proceed because he is the senior partner
- BThe change needs the consent of all partners, so Lena's objection prevents itCorrect
- CThe change is valid if Kofi gives Lena reasonable notice
Explanation
Ordinary matters are decided by majority, but a change in the nature of the partnership business needs unanimous consent. With two partners, Lena's objection blocks the change, and notice does not replace consent.
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