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      Question

      Under the Indian Partnership Act, 1932, the liability of

      partners for the firm's debts is:
      A Limited to their capital contribution Correct Answer Incorrect Answer
      B Joint and several, and applies to all partners without limit Correct Answer Incorrect Answer
      C Limited to a percentage of the firm's liabilities Correct Answer Incorrect Answer
      D Applicable only to the managing partner Correct Answer Incorrect Answer
      E Limited to contractual debts only Correct Answer Incorrect Answer

      Solution

      Section 9 of the Indian Partnership Act, 1932 provides that every partner is jointly and severally liable with the firm for all debts and obligations of the firm. This means a creditor can proceed against any partner for the entire debt. However, partners can be indemnified by the firm. Section 14 limits partners' rights to manage and bind the firm. [Citation: Sections 9 and 14, Indian Partnership Act, 1932]

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