In an ordinary partnership governed by the Partnership Act 1890, what is the liability of the partners for the debts of the firm?

Answer options:

Limited to their initial capital contribution.

Joint and several unlimited liability.

Liability is shared equally, up to a maximum of £10,000 each.

Only the managing partner has unlimited liability.

How to approach this question

Recall the fundamental risk of operating as an ordinary partnership.

Full Answer

B.Joint and several unlimited liability.✓ Correct

In an ordinary partnership, the firm has no separate legal personality. Therefore, partners have unlimited personal liability for the debts and obligations of the firm.

Common mistakes

Confusing an ordinary partnership with a Limited Liability Partnership (LLP).

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 1

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In an ordinary partnership governed by the Partnership Act 1890, what is the liability of the partners for the debts of the firm?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 1

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