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    Question

    Under Section 19 of the Indian Partnership Act, 1932,

    what is the extent of a partner's authority to bind the firm?
    A Every partner possesses absolute and unlimited authority to bind the firm in all personal and professional legal matters. Correct Answer Incorrect Answer
    B Each partner acts as an agent and can bind the firm for acts done in the usual course of partnership business within their actual or apparent authority. Correct Answer Incorrect Answer
    C A partner can only bind the firm if they obtain the prior written consent of every other partner for each specific transaction. Correct Answer Incorrect Answer
    D Partners are considered principals only and have no statutory authority to bind the firm or other partners through their actions. Correct Answer Incorrect Answer
    E The power to bind the firm is restricted exclusively to a designated "Senior Partner" or "Managing Partner" as registered with the Registrar of Firms. Correct Answer Incorrect Answer

    Solution

    Section 19 of the Indian Partnership Act, 1932, provides that each partner is an agent of the firm for purposes of partnership business. A partner's act within the actual/apparent scope of the partnership business binds the firm even if done without authorization (doctrine of apparent authority). However, acts outside partnership scope or expressly forbidden by partnership agreement don't bind the firm. Partners owe implied authority based on partnership business nature a partner in a trading firm can purchase goods on credit, but a partner in a professional firm may lack such authority. Other partners can be bound by contracts made by one partner within authority, creating firm's joint liability toward third parties acting in good faith.

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