To determine which statement about Mr. Abayomi is true, we need to analyze each option in the context of partnership law, particularly focusing on the characteristics of limited partners in a partnership. Correct Option: C. His actions as a limited partner can bind the firm. Explanation of Why Option C is Correct:

1. Understanding Limited Partnerships: In a limited partnership, there are two types of partners: general partners and limited partners. General partners manage the business and are personally liable for the debts of the partnership. Limited partners, on the other hand, typically invest capital but do not participate in the day-to-day management of the business.
2. Binding Actions: While limited partners do not have the authority to manage the business, their actions can still bind the firm in certain circumstances. If a limited partner takes actions that are outside the scope of their limited role, they may inadvertently assume the responsibilities of a general partner. This means that if Mr. Abayomi, as a limited partner, engages in activities that suggest he is managing the business, he could be held liable for the partnership's obligations.
3. Legal Implications: The law often holds that if a limited partner acts in a way that leads third parties to believe they are a general partner, those actions can bind the partnership. This is to protect third parties who may rely on the representations made by the partners.

Why the Other Options are Incorrect: Option A: He can assign his shares to another without consent of other partners.

• Explanation: In a limited partnership, the ability to transfer or assign shares (or interests) typically requires the consent of the other partners. This is to maintain the integrity of the partnership and ensure that all partners agree on who is involved in the business. Therefore, Mr. Abayomi cannot unilaterally assign his shares without the consent of the other partners.

Option B: He cannot take part in the management of the business.

• Explanation: While it is true that limited partners generally do not participate in the management of the business, this statement is misleading in the context of the question. The statement implies a complete prohibition, which is not entirely accurate. Limited partners can engage in some activities that do not equate to management, such as providing advice or attending meetings. However, if Mr. Abayomi were to take on a management role, he could risk losing his limited liability status.

Option D: His death will automatically dissolve the partnership.

• Explanation: The death of a limited partner does not automatically dissolve the partnership. In many jurisdictions, a limited partnership can continue even if a limited partner dies, as long as there are remaining partners. The partnership agreement may specify what happens in the event of a partner's death, and often, the partnership can continue with the remaining partners or through the estate of the deceased partner.

Summary of Key Points:

• Limited Partners: They invest capital but do not manage the business; their actions can bind the firm if they act beyond their role.
• Consent for Assignment: Limited partners cannot assign their shares without the consent of other partners.
• Management Participation: Limited partners should avoid management roles to maintain their limited liability status.
• Partnership Continuity: The death of a limited partner does not automatically dissolve the partnership; it can continue based on the partnership agreement.

This thorough understanding of partnership dynamics is crucial for anyone studying commerce and preparing for professional exams in this field.