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A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:
- a)Is liable to the firm
- b)Is liable to third parties
- c)Is liable to the continuing partners
- d)Is not liable to the third partners
Correct answer is option 'B'. Can you explain this answer?
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A third party deals with the firm without knowledge that Mr. X has bee...
When a third party deals with the firm without the knowledge that Mr.X has been expelled from the firm,in such a case Mr.X is liable to third parties because public notice of his expulsion has not yet been given.
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A third party deals with the firm without knowledge that Mr. X has bee...
Explanation:
When a third party deals with a firm without knowledge that Mr. X has been expelled from the firm, Mr. X is liable to third parties. This can be explained as follows:
- When a person becomes a partner in a firm, he becomes a co-owner of the assets of the firm and is liable to the creditors of the firm. This means that if the firm incurs any debts, the partners are jointly and severally liable to pay off the debts.
- If a partner is expelled from the firm, his liability to the creditors of the firm does not cease automatically. He remains liable to the creditors for any debts incurred by the firm before his expulsion.
- However, if a third party deals with the firm without knowledge that a partner has been expelled, the expelled partner is also liable to the third party. This is because the third party has entered into a contract with the firm based on the assumption that the expelled partner is still a partner of the firm. If the expelled partner fails to fulfill his obligations under the contract, the third party can hold him liable for breach of contract.
- Thus, in the given scenario, Mr. X is liable to the third party who has dealt with the firm without knowledge of his expulsion. Mr. X may have to pay damages or compensation to the third party for any loss suffered by him due to Mr. X's breach of contract.
- However, Mr. X may also have a claim against the continuing partners of the firm for any losses suffered by him due to his expulsion. He may argue that the expulsion was wrongful or illegal, and seek compensation from the continuing partners. But this claim will not affect his liability to the third party.
When a third party deals with a firm without knowledge that Mr. X has been expelled from the firm, Mr. X is liable to third parties. This can be explained as follows:
- When a person becomes a partner in a firm, he becomes a co-owner of the assets of the firm and is liable to the creditors of the firm. This means that if the firm incurs any debts, the partners are jointly and severally liable to pay off the debts.
- If a partner is expelled from the firm, his liability to the creditors of the firm does not cease automatically. He remains liable to the creditors for any debts incurred by the firm before his expulsion.
- However, if a third party deals with the firm without knowledge that a partner has been expelled, the expelled partner is also liable to the third party. This is because the third party has entered into a contract with the firm based on the assumption that the expelled partner is still a partner of the firm. If the expelled partner fails to fulfill his obligations under the contract, the third party can hold him liable for breach of contract.
- Thus, in the given scenario, Mr. X is liable to the third party who has dealt with the firm without knowledge of his expulsion. Mr. X may have to pay damages or compensation to the third party for any loss suffered by him due to Mr. X's breach of contract.
- However, Mr. X may also have a claim against the continuing partners of the firm for any losses suffered by him due to his expulsion. He may argue that the expulsion was wrongful or illegal, and seek compensation from the continuing partners. But this claim will not affect his liability to the third party.
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A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer?
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A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer?.
A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A third party deals with the firm without knowledge that Mr. X has been expelled from the firm. In such a case, Mr. X ________:a)Is liable to the firmb)Is liable to third partiesc)Is liable to the continuing partnersd)Is not liable to the third partnersCorrect answer is option 'B'. Can you explain this answer?.
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