Answer flag: Partnership, Tax Auditor Law 3-2025
During the October 2025 Tax Auditor exam, there was an interesting question shared with friends who were considering taking the tax auditor exam and friends who had already taken the exam and needed guidance on the subject of limited partnerships, which required one question in every exam.
The questions may not be detailed, but the key question was something like this: Meedee Limited Partnership, consisting of Mr. A, Mr. B, Mr. C, and Mr. D, was incorporated as Meedee Limited Partnership, with Mr. A appointed as managing partner. After the partnership had been in operation for some time, Mr. A traveled abroad and authorized Mr. B to execute contracts for a 30-day period, from January 1 to 30, 2025. Mr. B subsequently entered into two contracts with Mr. Ananda for purchases of goods in accordance with the partnership's objectives, on January 16, 2025, for 1 million baht, and February 15, 2025, for 2 million baht, respectively. Upon the due date, the partnership failed to pay for the goods. Mr. Ananda sought legal action, but since Mr. Ananda lacks a thorough understanding of partnership law, he approached you to ask. As a tax auditor with expertise in this area, what advice would you give Mr. Ananda?
Decision
Mr. A traveled abroad and authorized Mr. B to sign a contract for a 30-day period, January 1-30, 2025. Mr. B subsequently entered into two contracts with Mr. Ananda for products, at two different times: on January 16, 2025, for 1 million baht, and on February 15, 2025, for 2 million baht. Upon the due date, the company failed to pay for the products.
Therefore, the events occurred at two different times.
On January 16, 2025, Mr. B had the authority to sign the contract in the name of the partnership, thus binding the partnership.
Mr. Ananda can sue for the products against the following parties:
1. Meedee Limited Partnership, as the contracting party
2. Mr. A, Managing Partner of Meedee Limited Partnership, as an unlimited partner: jointly and severally liable for the partnership's debts without limitation This liability is in accordance with the principles of Section 1025, which are applied analogously (as per Section 1080).
3. Mr. B, a limited partner who intervened under Section 1087, interfering in the management of the partnership, will be punished by law by being liable for the partnership's debts without limitation, as if he were an unlimited partner.
The total amount of the lawsuit is 1 million baht, without any prior order, and the full amount will be paid. Mr. C and Mr. D, limited partners, are not liable for the partnership's debts under Section 1095 as long as the limited partnership has not been dissolved. Therefore, the partnership's creditors have no right to sue the limited partners, and therefore cannot sue.
Later, on February 15, 2025, Mr. B did not fall within the scope of the power of attorney.
Generally, Mr. B's actions, as a limited partner, when performed outside the scope of the power of attorney are not binding on the partnership. Mr. B had no authority to sign a contract on behalf of the partnership. However, later, the partnership learned of the purchase outside the order, but did not object, received the goods, and did not return them. The partnership is considered to have ratified the agreement.
Mr. Ananda can then sue the following parties for the goods:
1. Meedee Limited Partnership, as a contracting party.
2. Mr. A, Managing Partner of Meedee Limited Partnership, a partner with unlimited liability: jointly liable for the partnership's debts without limitation. This liability is in accordance with Section 1025, which applies mutatis mutandis (under Section 1080).
3. Mr. B, a limited partner who intervened under Section 1087 and interfered in the management of the partnership, will be punished by law and liable for the partnership's debts without limitation, as if he were an unlimited partner.
The total amount of the lawsuit is 2 million baht, regardless of the order of the debts. The lawsuit is to be paid in full. Mr. C and Mr. D, limited partners, are not liable for the partnership's debts under Section 1095, as long as the partnership has not been dissolved. Therefore, the partnership's creditors have no right to sue the limited partners, and therefore cannot sue.
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