CAF-4 · Chapter 13 · Question 1 of 10
What is the foundational principle regarding a partner's relationship with third parties in the conduct of the firm's business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A partner is the agent of the firm for the purposes of the business of the firm.
Explanation
Under Section 18, a partner is the agent of the firm for the purpose of the business of the firm, binding the firm by acts done in the usual course of business.
More Relations of partners to third parties MCQs
- Q3When a minor admitted to the benefits of a partnership attains the age of majority, what is the time limit for them to decide whether to…
- Q4If a minor attains majority, elects to become a full partner in the firm, and gives public notice, from what date does their personal…
- Q5Which of the following actions is a partner NOT empowered to do under their 'implied authority'?
- Q6Kamran, a partner, obtained a loan of Rs. 500,000 from a bank in the name of his trading partnership. He secretly used the money to pay…
- Q7Abid, a partner in FS, signs a contract with a third party. One month later, Haris joins FS as a new partner. Is Haris liable to the third…