If you and your business partners agree to limit what one or more of you can do to make the business responsible for something, this is important to know about. Let's say you all decide that one partner can't make big decisions without everyone agreeing. If that partner goes ahead and does something you all said they couldn't do, your business might not have to follow through on what they did. But this only works if the person or company your partner made the agreement with knows about the limits you all set. If they don't know about these limits, your business might still have to do what your partner agreed to.
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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206005.
18: Power of partner to bind firm, or
"Partners can make decisions that affect the whole partnership, but there are limits"
20: Partners bound by acts done or instruments executed on behalf of firm, or
"Partners are responsible for actions done for the partnership by someone with permission"
This section applies if—
The act is not binding on the firm with respect to any person who has notice of the agreement.
