`Third party` in partnership firm meansa)outsiders to firmb)partnersc)firm itselfd)none of theseCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Correct answer is option A) outsiders to firm.

Explanation:

The term "third party" refers to any individual, business, or organization that is not directly involved in a particular partnership or transaction. In the context of a partnership firm, a third party would be an entity that is not a partner or the firm itself. This can include suppliers, customers, creditors, or any other external parties that the partnership firm interacts with during the course of its business activities.

Answer

The term 'third party' refers to individuals and institutions not forming a part of the partnership firm itself. The firm is the same as all of its partners as it does not have a separate legal identity of its own.

Answer

Explanation:
In a partnership firm, a third party refers to any individual or entity that is not a partner of the firm. They are outsiders who are not directly involved in the operations or management of the firm.

Partnership Firm:
A partnership firm is a type of business organization where two or more individuals come together to carry on a business with a common goal of making profits. The partners contribute capital, share profits and losses, and have joint ownership of the firm. The partnership firm is created by an agreement known as the partnership deed.

Types of Partners:
In a partnership firm, there are different types of partners, including:
1. Active Partners: These partners actively participate in the day-to-day operations and management of the firm.
2. Sleeping or Dormant Partners: These partners contribute capital but do not participate in the management of the firm.
3. Nominal Partners: These partners lend their name to the firm but do not contribute capital or participate in the management.
4. Partner by Estoppel: This refers to a person who is not actually a partner but is held liable as a partner by third parties due to their actions or representations.

Third Party in Partnership Firm:
The term 'third party' in a partnership firm refers to any individual or entity that is not a partner in the firm. They are external to the partnership and have no direct involvement in the operations, management, or decision-making of the firm. Third parties can include customers, suppliers, creditors, lenders, government authorities, and any other person or organization that interacts with the partnership firm.

Example:
For example, if a partnership firm enters into a contract with a supplier to purchase goods, the supplier is considered a third party. They are not a partner in the firm but have a business relationship with the partnership. Similarly, if a partnership firm takes a loan from a bank, the bank is a third party as they are external to the partnership.

Liability of Third Parties:
In a partnership firm, the partners are jointly and severally liable for the debts and obligations of the firm. This means that if the firm fails to meet its obligations, the partners are personally liable to the third parties. The third parties can legally enforce their claims against the partners' personal assets.

Conclusion:
In a partnership firm, a third party refers to any individual or entity that is not a partner in the firm. They are outsiders who have business relationships with the partnership but are not involved in the operations or management of the firm.

Similar CA Foundation Doubts

Which one of the following statements is true.

In a partnership where partners agree to give share in profit but without any rights of the firm such partner is

In a partnership where partners agree to give share in profit but without any rights of the firm such partner is

Why should the old partners bear the balance of deferred revenue expenditure at the joining of new partner in partnership firm while such new partner will get the benefit of such revenue expenditure as the revenue has been increased due to such revenue expenditure.?

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