The formation and constitution of business organisations — ACCA Practice Question 10

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Consider the steps a retiring partner must take to sever their legal ties with the firm and protect themselves from future liabilities.

Full Answer

B.They remain liable to existing creditors unless they give actual notice of their retirement.✓ Correct

Under the Partnership Act 1890, a retiring partner remains liable for debts incurred after retirement to persons who dealt with the firm before retirement, unless actual notice is given to those persons. Notice in the London Gazette is sufficient for those who had not previously dealt with the firm.

Common mistakes

Assuming that simply leaving the partnership ends all liability immediately.

Section A

Under the Partnership Act 1890, what is the liability of a retiring partner for debts incurred by the partnership AFTER their retirement?

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Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

More questions from this exam

Section A Under the Partnership Act 1890, what is the liability of a retiring partner for debts incurred by the partnership AFTER their retirement?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

More questions from this exam

Section A

Under the Partnership Act 1890, what is the liability of a retiring partner for debts incurred by the partnership AFTER their retirement?