Please answer only if you are sure about the answer. In December 2016, Charlotte
ID: 2598810 • Letter: P
Question
Please answer only if you are sure about the answer.
In December 2016, Charlotte became the 25th partner with International Enterprises, an existing general partnership with 24 partners. In April 2017, an International Enterprises partnership debt came due in full in the amount of $100,000. The debt was originally incurred in June 2016. Charlotte is:
A. Only liable for the debt up to the amount of her capital contribution to the partnership.
B. Not liable for the debt because the debt was incurred prior to her joining the partnership.
C. Liable for her pro-rata one-twenty fifth share of the total debt along with the other partners.
D. Liable for one-twenty fifth of the debt if all the other partners default on the debt ad refuse to pay.
Explanation / Answer
B. Not liable for the debt because the debt was incurred prior to her joining the partnership
As per the Partnership Act the incomming partner is not liable for any debt before his/her joining which means the person is only liable for debt which stood in books after his/her joining i.e why she is not liable for any debt stood in the books before her joining.