Question

A Partnership firm: A. is created by contract B. is distinct entity from its partners C. is an independent juristic person D. is an agent of its partners. Choose the correct answer from the options given below:

• A. A only
• B. A, B only
• C. B, C only
• D. C, D only

Hint:

Partnership is created by contract, but a firm is not a separate juristic person like a company.

Answer 1

The Correct Option is A

Concept: Partnership is based on agreement. A partnership firm under general Indian partnership law is not treated as a separate juristic person like a company.

Step 1: Check Statement A.
A partnership is created by contract between persons who agree to share profits of a business. \[ A = \text{Correct} \]

Step 2: Check Statement B.
A partnership firm is not a distinct legal entity separate from its partners in the same way as a company. \[ B = \text{Incorrect} \]

Step 3: Check Statement C.
A firm is not an independent juristic person. The partners collectively constitute the firm. \[ C = \text{Incorrect} \]

Step 4: Check Statement D.
A partner is an agent of the firm and other partners. The firm itself is not described as the agent of its partners. \[ D = \text{Incorrect} \] Therefore, only statement A is correct.