Question

Which of the following statements are correct:

1. The liability of a partner for acts of the firm is unlimited.
2. Private assets of a partner can also be used for paying the debts of the firm.
3. Each partner is liable jointly with all other partners and also severally to the third parties for all the acts of the firm done, while he is a partner.
4. The liability of a partner is limited to the extent of his capital contribution.

Options

• Only (iii)

• (i) and (ii)

• (i), (ii) and (iii)

• (i), (ii), (iii) and (iv)

Answer 1

(i), (ii) and (iii)

1. The liability of a partner for acts of the firm is unlimited.
2. Private assets of a partner can also be used for paying the debts of the firm.
3. Each partner is liable jointly with all other partners and also severally to the third parties for all the acts of the firm done, while he is a partner.

Explanation:

Statement (iv) is incorrect because the liability of a partner is not limited to the capital contribution unless otherwise mentioned in the partnership deed.