Multiple choice

Which of the following acts are not included in the implied authority of a partner?

  1. To buy or sell goods on accounts of partners.

  2. To borrow money for the purposes of a firm.

  3. To enter into partnership on behalf of a firm.

  4. To engage a lawyer to defend actions against a firm.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Partners have implied authority to act in the ordinary course of business, such as buying/selling goods or borrowing money for firm purposes. However, entering into a new partnership on behalf of the firm is a fundamental structural change that requires express authority from all partners. This act is outside the scope of implied authority as it could significantly alter the firm's composition and liabilities.

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