Commercial Applications
Statement I: A partnership is a voluntary association of two or more persons who agree to carry on some business jointly and share its profits and losses.
Statement II: The persons who enter into partnership are individually called 'partners' and collectively called 'firm'.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Partnership
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Answer
Both I and II are correct
Reason — Both statements describe partnership correctly. Statement I gives the correct definition of partnership as a voluntary association of two or more persons agreeing to carry on a business jointly and share profits and losses. Statement II correctly states that the persons who enter into partnership are individually called 'partners' and collectively called a 'firm', while the name under which they carry on business is called the 'firm name'.
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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 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 statements regarding partnership is incorrect?
- Secrets are known to partners.
- Coordination between partners is not required.
- Ownership is shared by partners.
- Agreement is essential.