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    Question

    According to the principle of indemnification in

    partnership law, what obligation does a partner have if they commit fraud in the conduct of the firm's business?
    A The partner must personally compensate for any losses incurred by the firm, but not for losses due to fraud Correct Answer Incorrect Answer
    B The partner is exempt from indemnifying the firm if the fraud was unintentional Correct Answer Incorrect Answer
    C The partner must indemnify the firm for any loss caused by their fraud in the conduct of the business Correct Answer Incorrect Answer
    D The partner's liability for fraud is limited to the amount of their investment in the firm Correct Answer Incorrect Answer
    E The partner is not liable for any losses caused by their fraud if the fraud was committed for personal gain Correct Answer Incorrect Answer

    Solution

    Partnership Act: Section 10. Duty to indemnify for loss caused by fraud: Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

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