Question
In January 2019, Kim Choo set up a bakery called 'Strawberry Cake House' in partnership with her friends Amutha and Diana. The partners did not
In January 2019, Kim Choo set up a bakery called 'Strawberry Cake House' in partnership with her friends Amutha and Diana. The partners did not execute a 17partnership agreement. Two large baking ovens and some baking utensils which were used by the partnership were owned by Kim Choo. Kim Choo had a lot of ideas on how she felt the business should be run but her ideas were not accepted by the other two partners. On account of this, the partners were having a lot of disagreements and disputes. Kim Choo was frustrated as she was unable to implement her business plans. So, in September 2019, Kim Choo spoke to Amutha and Diana of her plans to set up a new bakery in partnership with her sister, Kim Bee. Amutha and Diana consented to Kim Choo starting her new bakery. The bakery was called 'Kim's Bakery'. In October 2019, Kim Choo retired as a partner from 'Strawberry Cake House'. Business was good at Kim's Bakery. In January 2020, Kim's Bakery made a profit of RM30,000. While, on the other hand, business was bad at Strawberry Cake House which was experiencing financial problems. Strawberry Cake House had outstanding debts of RM10,0000 with Bank Besar (incurred before 1st October 2019) and RM50,000 with United Bank (incurred after 1st October 2019). Advise Kim Choo on the following:
b) Whether she is liable for the outstanding debts of Strawberry Cake House to Bank Besar and United Bank?
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