Under section 19(2) of the Indian Partnership Act, 1932, assume no contrary usage or custom of trade.…
Section 19(2)(a) excludes submission of a firm dispute to arbitration, absent contrary trade usage or custom. Section 19(2)(b) excludes opening a firm bank account in the…
Choose your answer
Under section 19(2) of the Indian Partnership Act, 1932, assume no contrary usage or custom of trade. Which statements about a partner's implied authority are correct?
A. It authorizes submitting a dispute about the firm's business to arbitration.
B. It authorizes opening a bank account on behalf of the firm in the partner's own name.
C. It does not authorize withdrawing a suit or proceeding filed on behalf of the firm.
D. It does not authorize entering into a partnership on behalf of the firm.
Answer and explanation
Correct answer C
Section 19(2)(a) excludes submission of a firm dispute to arbitration, absent contrary trade usage or custom.
Section 19(2)(b) excludes opening a firm bank account in the partner's own name.
Section 19(2)(d) excludes withdrawal of a firm suit or proceeding, and clause (h) excludes entering a partnership on the firm's behalf.
Option feedback
Option A
The opening of a firm bank account in a partner's own name is excluded.
Option B
Both asserted grants of authority are excluded.
Option C
Withdrawal of a firm proceeding and entering into a partnership for the firm are both excluded.
Option D
The arbitration and bank-account propositions incorrectly describe excluded powers as granted.
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