'A' has lent money to 'P&Q' firm engaged in the cement business and has agreed to take in addition to,…
Under Explanation 2 to Section 6 of the Indian Partnership Act, 1932, a lender of money who receives a share of profits does not thereby become a partner, so "'A' is not a…
Choose your answer
'A' has lent money to 'P&Q' firm engaged in the cement business and has agreed to take in addition to, or in place of his interest, a portion of the profits of the firm business. It can be said that
Answer and explanation
Correct answer C
Under Explanation 2 to Section 6 of the Indian Partnership Act, 1932, a lender of money who receives a share of profits does not thereby become a partner, so "'A' is not a partner in the 'P&Q' firm." but only a creditor.
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