Asked by Ashley Ochoa on Apr 30, 2024
Verified
Rosa is a partner in Sugar & Spice, a partnership consisting of the owners of a bakery. Sugar & Spice incurs debt for new ovens. With respect to this debt, Rosa is
A) not liable.
B) only liable to the amount of her capital contribution.
C) only liable in proportion to the number of partners in the firm.
D) personally liable to the full extent.
Personally Liable
The legal responsibility of an individual to fulfill a debt or obligation from their own assets.
Partnership Debt
Financial obligations for which all partners in a partnership are jointly and severally liable.
New Ovens
Recently manufactured or acquired cooking appliances designed for baking, heating, or drying food.
- Understand the privileges and authorities of collaborators within a partnership, as well as the processes of separation and responsibilities.
Verified Answer
CU
CHRISTOPHER UNIGARROMay 02, 2024
Final Answer :
D
Explanation :
In a general partnership, each partner is personally liable for the debts of the business to the full extent of their personal assets, not just to the amount of their investment or in proportion to their share of ownership. This means that if the partnership cannot pay its debts, creditors can seek repayment from any or all of the partners' personal assets.
Learning Objectives
- Understand the privileges and authorities of collaborators within a partnership, as well as the processes of separation and responsibilities.
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