| Commentary

16.3 Contractual capacity

| Commentary

16.3 Contractual capacity

One possible issue which may arise in the context of a business is its capacity to contract with others. This has never been a problem for a sole trader who, as an individual, will normally have an unlimited capacity to contract1. The same principle applies where the business is being run through a general partnership, because the partnership is not a legal entity and third parties are treated as contracting with each of the partners individually.

Where the parties have decided to use a limited liability partnership, the position is again straightforward. The Limited Liability Partnerships Act 2000

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