Commercial Applications
Assertion (A): In a Limited Liability Partnership (LLP), the liability of the partners is limited to their agreed contribution.
Reasoning (R): An LLP is a hybrid form of business organisation combining features of a partnership and a joint-stock company.
- Both A and R are true, and R is the correct explanation of A.
- Both A and R are true, but R is not the correct explanation of A.
- A is true, but R is false.
- A is false, but R is true.
Partnership
1 Like
Answer
Both A and R are true, and R is the correct explanation of A.
Reason — Assertion (A) is true because in an LLP, the liability of partners is limited to their agreed contributions to the LLP. Reasoning (R) is also true because LLP is a hybrid form of business organisation combining features of both partnership firm and joint stock company. R correctly explains A because the feature of limited liability in LLP is derived from the joint-stock company aspect of this hybrid form of organisation.
Answered By
3 Likes
Related Questions
In a partnership at will, any partner can dissolve the firm by giving notice to the other partners.
- True
- False
Two friends, Ajay and Sameer, jointly own a property but do not run a business with it. Can this arrangement be considered a partnership?
- Yes, because they jointly own a property
- No, because they are not running a business
- Yes, if they share the rental income equally
- No, because partnership must involve more than two people
A client sues a partnership firm for not delivering goods on time. The court orders all partners to pay compensation using their personal assets. What feature of partnership leads to this situation?
- Unlimited liability
- Mutual agency
- Sharing of profits and losses
- Restriction on transfer of interest
Define partnership.