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Question
Which of the following statement is incorrect?
Options
Each partner is liable to an unlimited extent for the firm’s obligations towards outsiders.
A partnership can be formed only for the purpose of carrying on a business.
Each partner is liable for acts performed by other partners on behalf of the firm.
An association of persons who jointly own a house without carrying on a business can be considered as partnership.
MCQ
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Solution
An association of persons who jointly own a house without carrying on a business can be considered as partnership.
Explanation:
- Partnership involves an agreement between two or more persons to carry on some lawful business and share its profits. Ownership alone without business activity does not constitute a partnership.
- Each partner is liable to an unlimited extent for the firm’s obligations towards outsiders.
- Partnerships can only be formed for carrying on a lawful business.
- Each partner is liable for acts performed by other partners on behalf of the firm.
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