39.7k views
4 votes
Paula, Fred, and Stephanie agree that Paula and Fred will form and conduct a partnership business and that Stephanie will become a partner in two years. Stephanie agrees to lend the firm $50,000 and take 10 percent of the profits in lieu of interest. Without Stephanie’s knowledge, Paula and Fred tell Harold that Stephanie is a partner, and Harold, relying on Stephanie’s sound financial status, gives the firm credit. The firm later becomes insolvent, and Harold seeks to hold Stephanie liable as a partner. Should Harold succeed? Explain

1 Answer

3 votes

Answer:

Harold would not Succeed

Step-by-step explanation:

Stephanie has only agreed to become partner after 2 years and she (Stephanie) was not aware that she was presented to Harold as a partner. Her agreeing to collect 10% profit in lieu of interest does not make her a partner. Therefore, she can not be held liable in the event of insolvency.

User Monay
by
7.8k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.