What is the extent of a partner's liability in a partnership firm?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Unlimited liability.
The liability of a partner is unlimited in a partnership firm.
Each partner is liable jointly with all the other partners and also severally to the third party for all the acts of the firm done while he is a partner. Not only that the liability of a partner for acts of the firm is also unlimited. This implies that his private assets can also be used for paying off the firm’s debts.