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To pay all the obligations debts of the partnership

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to pay all the obligations (debts) of the partnership.Suppose, for example, the liabilities of ABC company (a partnership business) as of a certainSuppose, for example, the liabilities of ABC company (a partnership business) as of a certaindate is birr 600,000, however, the total properties (assets) of ABC company could only be solddate is birr 600,000, however, the total properties (assets) of ABC company could only be soldfor birr 450,000. Thus, to settle creditors claims fully, the house or personal assets of thefor birr 450,000. Thus, to settle creditors claims fully, the house or personal assets of thepartners may have to be sold.partners may have to be sold.D) Mutual AgencyD) Mutual AgencyEach partner is an agent of the partnership within the scope of the business.This means thatEach partner is an agent of the partnership within the scope of the business.This means thatpartner’s act to any contract is binding on the remaining partners as long as it is with in thepartner’s act to any contract is binding on the remaining partners as long as it is with in theapparent scope of the business’ operations.apparent scope of the business’ operations.For example, a partner in a public accounting firm can bind the partnership through theFor example, a partner in a public accounting firm can bind the partnership through thedelivery of accounting services.redundent.But this partner cannot bind the partnership to adelivery of accounting services.redundent.But this partner cannot bind the partnership to acontract for delivering (or providing) cars because it is out of the scope of the business.contract for delivering (or providing) cars because it is out of the scope of the business.E) Co ownership of partnership propertyE) Co ownership of partnership propertyOnce invested, the properties contributed by the partners become the property of theOnce invested, the properties contributed by the partners become the property of thepartnership and is owned jointly by all the partners.Upon liquidation of the partnership andpartnership and is owned jointly by all the partners.Upon liquidation of the partnership anddistribution of assets, the partner’s claim on the assets is measured by the amount of thedistribution of assets, the partner’s claim on the assets is measured by the amount of thebalance in his/her capital account.balance in his/her capital account.76
8.3 ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP8.3 ADVANTAGES AND DISADVANTAGES OF PARTNERSHIPAdvantages:Advantages:A partnership form of business ownership has the following advantages:A partnership form of business ownership has the following advantages:1.1.Easy and inexpensive to form than a corporation. A partnership is easy to form.ItEasy and inexpensive to form than a corporation. A partnership is easy to form.Itonly requires the consent of two or more parties.Two or more competent persons simplyonly requires the consent of two or more parties.Two or more competent persons simplyagree to be partners in some common business purpose.agree to be partners in some common business purpose.

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Term
Fall
Professor
cherinet
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