9. Carson, Crocket, and Kitt were partners in the import- ing business. They nee
ID: 2564781 • Letter: 9
Question
9. Carson, Crocket, and Kitt were partners in the import- ing business. They needed additional capital to expand They located an investor named White, who agreed to purchase a one-fourth interest in the partnership by contributing $50,000 in capital. At the time White became a partner, there were several large creditors who had previously lent money to the partnership. The partnership subsequently failed, and the creditors are attempting to assert personal liability against White. Is he liable for these debts? Explain.Explanation / Answer
Yes - White is personally liable for all the debts of the partnership, whether entered into before or after his admission. On the date of admission, a new partner takes share in all the assets and liabilities of the business, so he becomes liable to all the creditors existed on the date of admission.
In view of above, White is personally liable to the debts of creditors, who were there on the day of his admission and also to the creditors who entered in business after the day of admission.
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