Commercial Applications
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.
Partnership
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Answer
Coordination between partners is not required.
Reason — This statement is incorrect. In a partnership, coordination between partners is essential because the business is carried on by all the partners or by any of them acting on behalf of all. Since every partner is an implied agent of the others and the firm, proper coordination among partners is necessary for smooth functioning of the business.
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Related Questions
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 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.
Which of the following is NOT a merit of partnership?
- Ease of formation
- Scope for expansion
- Uncertain life
- Combined abilities and judgement
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.