Liability of retiring or outgoing partner:

When a partner retires or leaves the firm, it is important to understand the extent of their liability for the firm's obligations. The correct answer is option 'C' - the retiring or outgoing partner is liable for obligations incurred before his retirement.

Explanation:

Retirement or outgoing of a partner from a partnership firm can affect the liability of the partner for the firm's obligations. Here are some key points to understand the liability of a retiring or outgoing partner:

Liability for past obligations: A retiring or outgoing partner is liable for obligations incurred before his retirement. This means that if the firm has any pending liabilities or debts from before the partner's retirement, the partner will be held responsible for their share of the liability.

Liability for future obligations: A retiring or outgoing partner is not liable for any liabilities of the firm that arise after their retirement. This means that any debts or obligations that the firm incurs after the partner's retirement will not be the responsibility of the partner.

Exceptions to liability for past obligations: There are some exceptions to the liability of a retiring or outgoing partner for past obligations. For example, if the retiring partner has guaranteed any specific debts of the firm, they will continue to be liable for those debts even after their retirement.

Consent for obligations: A retiring or outgoing partner is liable for obligations incurred with their consent only. This means that if the firm incurs any debt or obligation without the partner's consent, the partner will not be held liable for it.

Conclusion:

In summary, a retiring or outgoing partner is liable for obligations incurred before their retirement, but not for any obligations that arise after their retirement. However, there are some exceptions to this rule, and the partner may also be held liable for specific debts that they have guaranteed, even after their retirement.