First Principles of Business Law
Business organisations in Australia

5. Partnerships

Question 18. Is it possible for a limited partner to lose the benefit of limited liability?

 

 

 

Read the statements below and select the best one.

(a) A partner with limited liability must not participate in the management of the business. If they do so, they lose their limited liability completely.

(b) A partner with limited liability is entitled to take part in the management of the business, but not to enter into contracts or other legal transactions on behalf of the firm, and if they enter into such transactions, they lose their liability in respect of that transaction.

 

 

 

 

 

 

 

 

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