A partner acts in the name of a trading firm. Assume no contrary trade usage and no agreement extending…
Section 19(1) links implied authority to the usual way of conducting the kind of business the firm carries on. Section 19(2)(h) excludes entering another partnership on the…
Choose your answer
A partner acts in the name of a trading firm. Assume no contrary trade usage and no agreement extending or restricting the partner’s authority. Which act falls outside the partner’s implied authority under the Indian Partnership Act, 1932?
Answer and explanation
Correct answer A
Section 19(1) links implied authority to the usual way of conducting the kind of business the firm carries on.
Section 19(2)(h) excludes entering another partnership on the firm's behalf in the absence of contrary trade usage.
Sections 20 and 22 address changes to implied authority and the manner of acting to bind the firm.
Option feedback
Option A
Section 19(2)(h) excludes entering into another partnership on behalf of the firm from the default implied authority.
Option B
Borrowing on behalf of a trading firm can fall within section 19(1) when it is in the ordinary way of the firm’s business.
Option C
Buying regular stock in the firm’s name is an ordinary act in carrying on its trade.
Option D
Selling regular stock in the firm’s name is an ordinary act in carrying on its trade.
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