Question
Download Solution PDFWhich of the following are false?
A. Partners are not bound to carry on the business of the firm to the greatest common advantage
B. Where a partner is entitled to interest on capital subscribed by him, such interest shall be payable whether or not there are profits
C. An outgoing partner has a right to claim a share in the profits of the firm till his account is finally settled
D. A partner may be expelled from the firm only with the consent of all other partners
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFAccording to The Partnership Act, 1932:
A. All partners are bound to carry on the business of the firm to the greatest common advantage and shall not obtain a private advantage at the expense of the firm and if a partner carries on a rival business in competition with the partnership, the other partners are entitled to restrain him.
B. Where a partner is entitled to interest on the capital subscribed by him, such interest on capital is an appropriation and shall be payable only out of the profits of the firm.
C. Every outgoing partner or the estate of any partner who ceased to be a partner has the right to claim either a share in the profits of the firm till his account is finally settled or an interest rate of six percent per annum on his share in the firm's property till his account is finally settled.
D. Expulsion of partner - Section 33 of the Partnership Act, 1932:
- A partner may not be expelled by a firm by any majority of the partners, save in the exercise in good faith or powers conferred by contract between the partners.
- The provisions of sub-sections (2), (3), and (4) of section 32 shall apply to an expelled partner as if he were a retired partner.
Therefore, Statements A, B, D only are false.
Last updated on Jun 19, 2025
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