Partnership Firm as a Legal Entity

A partnership firm is a business structure in which two or more individuals unite to carry on a business for profit. It is a popular form of business organization in India, as it is easy to set up and manage. However, a partnership firm is not a legal person or entity, unlike a company or corporation.

Explanation of the Answer

The correct answer is option 'C' because a partnership firm is not a legal person. The following points explain why a partnership firm is not a legal entity:

1. No Separate Legal Entity: A partnership firm does not have a separate legal identity from its partners. In other words, the firm and its partners are the same entity in the eyes of the law.

2. No Perpetual Existence: A partnership firm is a temporary arrangement and does not have perpetual existence. It is dissolved when any of the partners withdraws, dies, or becomes insolvent.

3. No Right to Sue or Be Sued: A partnership firm cannot sue or be sued in its own name. Instead, the partners must sue or be sued in their individual capacity.

4. No Ownership of Property: A partnership firm cannot own property in its own name. The property is owned by the partners in their individual capacity.

Conclusion

In conclusion, a partnership firm is not a legal entity as it does not have a separate legal identity, perpetual existence, or the right to sue or be sued in its own name. The partners are jointly and severally liable for the debts and obligations of the firm.