Problem:
Jason and John are partners in a partnership called Fancy Dress Suppliers' which sells, rents and supplies fancy dress outfits and accessories. The business is having financial difficulties. Jason and John approach their friend Sam to provide them with some financial assistance and become a silent partner. A Sam state that is does not wish to be a partner, silent or otherwise, but will lend the firm $10,000 provided he is repaid S 1,000.00 per year. Jason and John intend to repay Sam out of the gross returns of the business. It is agreed that Sam will not be described as a partner. Sam, however requests that Jason and John give him access to the firm's financial statements every three months and that they inform him of any significant matters that may affect the firms' financial position. Jason ado John agrees. Six months later Belle Products, a costume maker, sues Fancy Dress Supplies for monies outstanding. Jason and John fail to inform Sam. that the firm has been sued. Advise Sam whether he has any liability as a partner.
Additional Information:
This question is from Law as well as it explains regarding the scenario where two partners of company obtain aid from a third friend who lends money on certain situations. As the conditions haven't been met, does the third friend have liability if the partnership be sued.
Total Word Limit: 107 Words