Commercial Applications
Which of the following statement is incorrect?
- 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.
Partnership
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Answer
An association of persons who jointly own a house without carrying on a business can be considered as partnership.
Reason — This statement is incorrect. A partnership can be formed only for the purpose of carrying on a lawful business. An association of persons who jointly own a house without carrying on a business is not a partnership, because the essential element of a business activity is missing.
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Related Questions
An unregistered partnership firm cannot enforce its claims against a third party in a court of law.
- True
- False
Which of the following is not a feature of partnership?
- Partnership is based on mutual trust and confidence.
- Partnership business can be carried on by all the partners or by any of them acting on behalf of others.
- Partners can transfer his share in the partnership without the prior consent of all other partners.
- A partnership firm has no separate legal existence independent of the partners.
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