Skip to content

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

Lena, Marco and Nia are partners with no agreement on how decisions are made. A new type of business, outside the firm's existing line of trade, is proposed. Lena and Marco vote in favour, while Nia objects. Another dispute arises over a routine purchase of stock: Lena and Marco favour it and Nia objects. Under the default rules, which statement is correct?

The routine purchase can be decided by majority, but changing the nature of the business needs every partner's agreement. Ordinary management differences are settled by majority, while fundamental changes require unanimous consent under the default rules.

  1. ABoth decisions can be made by a majority
  2. BNeither decision can be made by a majority
  3. CThe routine purchase can be made by a majority, but changing the nature of the business requires unanimityCorrect
  4. DThe change of business can be made by a majority, but the routine purchase requires unanimity

Explanation

Ordinary differences about the running of the business are decided by a majority of partners. A change in the nature of the partnership business requires the consent of all partners. Nia can therefore block the new venture but not the routine stock purchase.

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