The Benefits of Mutual Agency in Partnership (Other (Not Listed) Sample)
The paper answers some business related questions majoring on tHE limitations in a partnership. Mutual Agency, limited life and limited liability are discussed as the major limitations.
Under Mutual agency, every PARTNER is given the ability to act as an agent for the partnership when deALING with outside entities such as vendors and lenders. The partnership is then bound by the actions of each partner acting within the scope of partnership activities.
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* Mutual agency, limited life and unlimited liability are the main limitations of partnership. When engaging in partnership business, mutual agency requires each shareholder to act on behalf of the partnership. A partner’s act binds on the other partners even if it is beyond the scope of their partnership provided it is beneficial to the partnership. A partnership can be dissolved voluntarily or involuntarily because it has does not have unlimited life. For the discussed partnership, limited life is not a major disadvantage. In unlimited liability each partner is personally accountable for all liabilities in the partnership. Creditors’ claims are initially attached to the partnership’s assets then to individual partner’s personal properties despite their capital equity in the company.
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