Question

Assertion (A): In partnership firm, the private assets of the partners can also be used to pay off the firm's debts.

Reason (R): The liability of the partners for acts of the firm is limited.

Choose the correct option from the following:

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is false, but Reason (R) is true.

• Assertion (A) is true, but Reason (R) is false.

Answer 1

Assertion (A) is true, but Reason (R) is false.

Explanation:

The partners' eligibility for Acts of the Firm is unrestricted. As a result, the firm's private assets can be used to pay off its debts.