Commercial Applications
Assertion (A): A partnership can only be formed for a lawful business.
Reasoning (R): Illegal activities like smuggling or theft can be considered as a partnership if profits are shared.
- 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
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Answer
A is true, but R is false.
Reason — Assertion (A) is true because a partnership can be formed only for the purpose of carrying on a lawful business. Reasoning (R) is false because illegal acts such as theft, dacoity and smuggling cannot be called a partnership, even if profits are shared among the persons involved.
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Related Questions
Which of the following statements regarding partnership is incorrect?
- Secrets are known to partners.
- Coordination between partners is not required.
- Ownership is shared by partners.
- Agreement is essential.
Which of the following is NOT a merit of partnership?
- Ease of formation
- Scope for expansion
- Uncertain life
- Combined abilities and judgement
Which of the following statements regarding partnership is correct?
- Less amount of funds are available
- They are difficult to form.
- Partnership business suffers from instability.
- Secrets are not known to all members.
Statement I: Registration of partnership firms is compulsory under the Partnership Act 1932.
Statement II: The registration of a firm is a difficult process.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are incorrect