- 8 Marks
Question
a) Azonto, Seamajolly, and Araba registered a firm of quantity surveyors under the name King & Associates.
Required:
Explain the position of the firm after registration and the rights and liabilities of the members of the firm towards each other. (8 marks)
Answer
- Section 10 of the Incorporated Private Partnerships Act, 1962 ACT 152 recognizes the fact that a firm is a body corporate, distinct from the partners of whom it is composed and capable of exercising the powers of a natural person. (2 marks)
- Despite the corporate nature of the firm, each partner of the firm is liable, without limitation, for the debts and obligations of the firm. A partner of the firm is entitled to an indemnity from the firm and to contribution from the co-partners in accordance with the rights of the partners under the partnership agreement. (3 marks)
- The limitless nature of the liability of the firm is indeed captured from the onset of registration of the firm—section 4 of Act 152. This is further buttressed by section 14 that states that a partner in a firm is jointly and severally liable with the firm and other partners for the debts and obligations of the firm incurred while that partner remains a partner. (3 marks)
- Tags: Firm Registration, Partner Liabilities, Partnership Law
- Level: Level 1
- Uploader: Dotse