Ho, Io, and Jo formed an ordinary partnership, called 3OS, some 5 years ago. Question Ho is a sleeping partner, whereas Io and Jo are active in the running of the business. Ho’sliability for partnership debts was agreed between the partners to be limited to the amountof his capital contribution, £15,000.Which of the below best describes the liability of Ho, Io, and Jo for partnership debts?A It is joint and several which means that several of the partners can be sued and since Ho isa sleeping partner he is not liable for any of the debtsB It is joint and several which means that all partners, excluding Ho, have unlimited personalliability and could be sued and required to pay the full amount of all the debtsC It is joint and several which means that all partners, including Ho, are responsible for ashare of the partnership debts in the same proportion as they share out the profitsD It is joint and several which means that each and every partner, including Ho, is fully liablewithout limit for all of the partnership debts and creditors can sue the partnerssimultaneously in one legal action or to choose to bring successive actions Question Ho now retires from 3OS. Prior to doing so Ho gave notice of his retirement to existingcustomers and advertised his retirement in the London Gazette.After Ho’s retirement Io entered into a contract on behalf of 3OS with Kay, a longstandingclient of the firm. The contract has resulted in a debt of £13,600 owed to Kay.Which of the below best describes Ho’s potential liability in relation to the debt owed toKay?A He is not liable for it as although Kay was an existing client at the time of his retirement, itwas incurred afterwards and he was no longer a part of the business at that timeB He is not liable for it as although Kay was an existing client at the time of his retirement, itwas incurred afterwards and he had already given notice of his retirement in the LondonGazetteC He is not liable for it as although Kay was an existing client at the time of his retirement, itwas incurred afterwards and he had already given actual notice of his retirement to existingcustomersD He is fully liable as the amount owed is less than the £15,000 agreed to limit his liability Question Also after Ho’s retirement Io entered into a contract on behalf of 3OS with Laura, a newcustomer who has never read the London Gazette and believed that Ho was still a partner inthe business. The contract with Laura incurred a debt of £16,000.Which of the below best describes Ho’s potential liability in relation to the debt owed toLaura?A He is not liable for it as Laura was not an existing client at the time of his retirement, it wasincurred afterwards and he was no longer a part of the business at that timeB He is not liable for it as Laura was not an existing client at the time of his retirement, it wasincurred afterwards and he had already given notice of his retirement in the London GazetteC He is not liable for it as Laura was not an existing client at the time of his retirement, it wasincurred afterwards and he had already given actual notice of his retirement to existingcustomersD He is liable not for the full amount but only for the amount of £15,000, as this is what hehad agreed with the other partners in terms of limiting her liability
Ho, Io, and Jo formed an ordinary
Question
Ho is a sleeping partner, whereas Io and Jo are active in the running of the business. Ho’s
liability for partnership debts was agreed between the partners to be limited to the amount
of his capital contribution, £15,000.
Which of the below best describes the liability of Ho, Io, and Jo for partnership debts?
A It is joint and several which means that several of the partners can be sued and since Ho is
a sleeping partner he is not liable for any of the debts
B It is joint and several which means that all partners, excluding Ho, have unlimited personal
liability and could be sued and required to pay the full amount of all the debts
C It is joint and several which means that all partners, including Ho, are responsible for a
share of the partnership debts in the same proportion as they share out the profits
D It is joint and several which means that each and every partner, including Ho, is fully liable
without limit for all of the partnership debts and creditors can sue the partners
simultaneously in one legal action or to choose to bring successive actions
Question
Ho now retires from 3OS. Prior to doing so Ho gave notice of his retirement to existing
customers and advertised his retirement in the London Gazette.
After Ho’s retirement Io entered into a contract on behalf of 3OS with Kay, a longstanding
client of the firm. The contract has resulted in a debt of £13,600 owed to Kay.
Which of the below best describes Ho’s
Kay?
A He is not liable for it as although Kay was an existing client at the time of his retirement, it
was incurred afterwards and he was no longer a part of the business at that time
B He is not liable for it as although Kay was an existing client at the time of his retirement, it
was incurred afterwards and he had already given notice of his retirement in the London
Gazette
C He is not liable for it as although Kay was an existing client at the time of his retirement, it
was incurred afterwards and he had already given actual notice of his retirement to existing
customers
D He is fully liable as the amount owed is less than the £15,000 agreed to limit his liability
Question
Also after Ho’s retirement Io entered into a contract on behalf of 3OS with Laura, a new
customer who has never read the London Gazette and believed that Ho was still a partner in
the business. The contract with Laura incurred a debt of £16,000.
Which of the below best describes Ho’s potential liability in relation to the debt owed to
Laura?
A He is not liable for it as Laura was not an existing client at the time of his retirement, it was
incurred afterwards and he was no longer a part of the business at that time
B He is not liable for it as Laura was not an existing client at the time of his retirement, it was
incurred afterwards and he had already given notice of his retirement in the London Gazette
C He is not liable for it as Laura was not an existing client at the time of his retirement, it was
incurred afterwards and he had already given actual notice of his retirement to existing
customers
D He is liable not for the full amount but only for the amount of £15,000, as this is what he
had agreed with the other partners in terms of limiting her liability
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