Determine the liability of the partnership

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Jemma and Carey have decided to go into business together. They produce and sell a range of children's clothing and toys .In order to obtain the necessary capital, they are able to persuade their mothers to invest $6000 each as limited partners. Jemma's mother used to work in the retail business and has some experience. She is very interested in her daughter and friends new venture. On numerous occasions, she has given advice to Jemma and Carey on the business and has even contacted former business associates to buy any surplus stock. She even goes into the office and fills in by taking orders. One day an angry and upset customer approaches Jemma and Carey threatening to sue the business, as her child had cut himself on a toy which had metal wires sticking out.

a. Explain what would be the liability, if any, of each of the mothers and why?

b. And what would be the liability of the partnership.

Reference no: EM132489164

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