'A', 'B' and 'C' are partners in a partnership firm named A B & C. 'A' retires from the firm without…
Under Section 32 of the Indian Partnership Act, 1932, a retiring partner remains liable to third parties who deal with the firm without notice of the retirement until public…
Choose your answer
'A', 'B' and 'C' are partners in a partnership firm named A B & C. 'A' retires from the firm without giving any public notice. Thereafter, an existing creditor lends Rs. ten lakh to the firm on the basis of his knowledge that 'A', 'B' and 'C' are the three partners in the firm. This amount remains unpaid by the firm. The creditor wants to recover the unpaid loan amount from the firm. Who will be liable for the unpaid loan amount?
Answer and explanation
Correct answer B
Under Section 32 of the Indian Partnership Act, 1932, a retiring partner remains liable to third parties who deal with the firm without notice of the retirement until public notice is given, so "'A', 'B' and 'C' will be liable for the unpaid loan amount."
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