Fred and Carole were trying to create a list of the pros and cons of sole proprietorship, partnership, and corporation to determine the best structure for carrying on business. Which of the following is true in regards to being a general partner?
A) A partner is liable for only the amount that he or she invested in the partnership firm.
B) Every general partner faces limited liability for the debts of the partnership.
C) Each partner is an agent for every other partner and of the firm itself, so a partner may be liable for the contracts made by an incompetent partner.
D) Retiring from a partnership by giving notice to his partners frees a partner from liabilities he faced while being a partner of the firm.
E) A partner is liable to pay from his personal assets only when the partner has committed a criminal act.

Question

Quizplus · Accepted Answer

General partners in a partnership have agency authority, meaning each partner can make decisions that bind the partnership and each other partner. This includes liability for contracts made by any partner on behalf of the partnership.

Fred and Carole Were Trying to Create a List of the Pros