Asked by MUHAMMAD OSAMA on May 31, 2024
Verified
Mutual agency means
A) Creditors can apply their claims to partners' personal assets.
B) Partners are taxed on partnership withdrawals.
C) All partners must agree before the partnership can act.
D) The partnership has a limited life.
E) A partner can commit or bind the partnership in any contract within the scope of the partnership business.
Mutual Agency
A principle in partnership businesses where each partner has the power to bind the partnership in agreements with third parties.
- Grasp the mutual agency principle and its significance in partnerships.
Verified Answer
CM
Celeste MartinezJun 05, 2024
Final Answer :
E
Explanation :
Mutual agency means that each partner has the power to commit or bind the partnership in any contract within the scope of partnership business, as long as it is done in the name of the partnership. This is known as the "principle of mutual agency." Therefore, choice E is the best answer.
Learning Objectives
- Grasp the mutual agency principle and its significance in partnerships.