ICAEW BL · Chapter 7 · Question 3 of 10
Ellis joins an existing partnership on 1 April. A supplier's invoice for goods delivered to the firm in February remains unpaid. Is Ellis personally liable for that debt?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) No, because a person admitted as a partner does not become liable for debts incurred before becoming a partner
Explanation
Under s17(1) Partnership Act 1890, a person admitted as a partner into an existing firm does not become liable to creditors for anything done before they became a partner. Liability for earlier debts arises only if there is a novation agreed with the creditor. Partners are liable for debts incurred while they are partners, not before.
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