The personal assets of the partners can be used to pay off firm's debts, if firm's assets are not sufficient, which of the following feature of partnership is highlighted above?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Unlimited Liability of Partners
Because the liability of a partner is unlimited, his private assets can be used to pay the firm’s debts when the firm’s assets fall short.
Option (1) Agreement — Incorrect. Agreement is the basis of forming a partnership, not of meeting its debts.
Option (2) Mutual Agency — Incorrect. It means each partner can act for all; it says nothing about private assets.
Option (4) Sharing of Profits — Incorrect. It is about dividing profits, not paying debts.
NCERT (2026-27 edition): |