Abby and Zeke begin a joint venture together selling fruitcakes door to door. Each invests $500. The joint venture generates large debts, and there is not sufficient income from the joint venture to pay them. Abby and Zeke as joint venturers are:

a. liable only to the amount of assets available in the joint venture.
b. liable only to the amount invested.
c. personally liable.
d. personally liable in proportion to the amount invested.

Being personally liable means that if the amount of assets available in the joint venture is not enough to pay back the debts owed by the joint venture, the joint venturers would have to pay the debt balance from private pockets.

Option A is applicable to limited liability companies as well as limited liability partnerships.

Option B is also wrong based on the point cited for option A.

The same issue applies to Option D.

In other words, options A,B and D are only applicable to limited liability situations and the joint venture is not a limited liability business.

elijahjoseph1 elijahjoseph1 · Answer 2 · 2020-02-28T08:22:20+01:00

elijahjoseph1 elijahjoseph1

28-02-2020

Answer: c. Personally liable

Explanation:

Abby and Zeke begin a joint venture together selling fruitcakes door to door. Each invests $500. The joint venture generates large debts, and there is not sufficient income from the joint venture to pay them. Abby and Zeke as joint venturers are therefore personally liable, because as joint ventures they must each take responsibility for the venture.

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