F4GLO Chapter 11 Questions
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Can any one help me understand the Question # 2…..>Why Justina has no limit of liability…. I think she should have limited liability of her capital contribution. Please let me know.
Thank You,
Partners in a partnership (unless it’s a limited liability partnership or a limited partnership – not the same thing) have unlimited liability
And that’s why Justina has unlimited liability!
OK?
Answer to the third question is incorrect. New partners should be liable only for debts which occur after they become partner. It is also included on BPP kit, 10.5 with right answer.
The answer to question 3 IS CORRECT
The BPP study text actually states on page 176 (English) and page 132 (global) “….. They are not liable for debts incurred before they were a partner unless they agree to become liable”
Question 3 asks “… where a contract of novation was signed”
That contract of novation absolves a retiring partner from further liability (if, in fact, there is a retiring partner) but results in the incoming partner accepting full liability for the debts and liabilities of the firm as they existed as at the date of the new partner being admitted
In fact, the answer provided for question 3 specifically identifies that “If there had been no contract of novation, the incoming partner would have been liable only for the debts and liabilities incurred since their admission into the firm”
All clear now?
Question 8, may have more than one wrong?
What else do you think is incorrect?