ACCA F4 Corporate and Business Law Practice Exam 2025 – Complete Prep Resource

The correct answer is a general partnership, which is directly addressed under the Partnership Act 1890. This Act lays down the foundational principles defining the characteristics and obligations of partners in a general partnership.

In a general partnership, all partners share equal responsibility for the management of the business and are personally liable for the partnership’s debts. Each partner is considered an agent of the partnership, meaning they can bind the partnership in contracts, thus creating legal obligations. The Act provides a clear framework for how partners work together, how profits are distributed, and how disputes can be resolved.

The other types of partnerships, such as limited partnerships and limited liability partnerships, are governed by different legislation. Limited partnerships, while mentioned in law, require a different structure where some partners have limited liability and are not involved in the day-to-day management. Limited liability partnerships are treated separately and provide a level of liability protection for all partners, which is not a characteristic of a general partnership as per the 1890 Act. Informal partnerships may exist but lack the legal recognition and structure established by the Act. Thus, the general partnership is the only one explicitly created and defined under the Partnership Act 1890.