[Anonymous]

This is an excerpt from a Becker MCQ:

“When a partner in a general partnership lacks actual or apparent authority to contract on behalf of the partnership”

I don’t understand why a partner in a general partnership would ever lack authority to contract. What am I missing?

[Anonymous]

They could be a silent partner for financial backing purposes, but with no participation in the management of the business, thus no authority.

[MikeHoncho]

Maybe something in the partnership agreement says otherwise

Done: 5/22/14

"Always do sober what you said you'd do drunk. That will teach you to keep your mouth shut."
- Ernest Hemingway

[Anonymous]

CPAMommy: Would they still be personally liable for the debts? If not, don't they cease to be a general partner thus creating a limited partnership?

[Anonymous]

@Bill–you're right. The general partner and a silent partner can't be the same thing. Thanks for that since I'm taking REG tomorrow! This says that a A Statement of Partnership Authority may be filed with the state and “This document specifies the authority, or limitations on the authority, of some or all of the partners to enter into transactions on behalf of the partnership and any other matter.”

https://www.business.ca.gov/StartaBusiness/DefiningaBusiness/GeneralPartnership.aspx

[Mamabear]

Now I'm confused. Ninja specifically states that silent partners do not make management decisions and have the same liability as a general partner.

CPA Exam - Finally DONE (November 2014)
BEC (08/10/13) 80
AUD (08/24/13) 65 (11/13/13) 85
FAR (04/12/14) 81
REG (07/19/14) 69 (11/29/14) 87!!

[Author]

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