LAW346: PARTNERSHIP

Under Section 16 and the doctrine of estoppel, when is a person liable as a partner in a firm?

• a. Only when they have signed a formal partnership agreement

• b. Only if they have invested capital into the business

• c. When they represent themselves, or allow themselves to be represented, as a partner and someone gives credit to the firm based on that representation

• d. Only if they actively participate in the management of the firm

A person can be held liable as a partner under Section 16 even if they did not directly communicate the representation to the person giving credit to the firm.

• TRUE

• FALSE

A person can be held liable as a partner even if there was no representation made that he is a partner.

• TRUE

• FALSE

For Section 16 to apply, the third party must believe the person is a partner and give credit to the firm based on that belief.

• TRUE

• FALSE

Which of the following are necessary conditions for Section 16 (doctrine of estoppel) to apply and hold someone liable as a partner?

• a. A representation is made, either by words or conduct, that the person is a partner

• b. A third party believes the representation and relies on it

• c. The third party gives credit to the firm as a result of the representation

• d. All of the above

Which of the following is required for notifying old customers about a partner’s retirement from a firm?

• a. A general notice in the Federal Gazette

• b. An actual notice to each customer

• c. A general notice in the Sabah Gazette

• d. A general notice in the Sarawak Gazette

According to Section 38(1), when a person deals with a firm after a change in its constitution, how are the members of the old firm treated until notice of the change is given?

• a. They are automatically considered as non-members of the firm

• b. They are still considered members of the firm until notice of the change is given

• c. The third parties must sign a new agreement with the new partners

• d. They are not responsible for any debts incurred after the change

When can a new partner be held liable for the debts of the old firm?

• a. If the new partner agrees to take on the debts through a novation agreement

• b. If the new partner was a co-signer of the old firm's debt

• c. If the new partner pays off the debts themselves

• d. If the new partner is informed by the old firm's creditors

For future customers, a general notice in the Federal Gazette, Sabah Gazette, or Sarawak Gazette is sufficient to notify them of a partner’s retirement.

• TRUE

• FALSE

Sec. 19(3) states that a retiring partner would not be discharged from liability for debts and obligations incurred whilst he is a partner by way of novation.

• TRUE

• FALSE