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The implied authority of a partner in a firm does not empower him to :
- a)Open a bank account on behalf of the firm
- b)Engaging and discharging employees
- c)Accepting any amount of debts due to the partnership firm
- d)Enter into partnership on behalf of the firm
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
The implied authority of a partner in a firm does not empower him to :...
Implied authority of partner as agent of the firm:
(1) Subject to the provisions of section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm.
The authority of a partner to bind the firm conferred by this section is called his "implied authority".
(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to —
(a) submit a dispute relating to the business of the firm to arbitration,
(b) open a banking account on behalf of the firm in his own name,
(c) compromise or relinquish any claim or portion of a claim by the firm,
(d) withdraw a suit or proceeding filed on behalf of the firm,
(e) admit any liability in a suit or proceeding against the firm,
(f) acquire immovable property on behalf of the firm,
(g) transfer immovable property belonging to the firm, or
(h) enter into partnership on behalf of the firm.
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The implied authority of a partner in a firm does not empower him to :...
The implied authority of a partner in a firm refers to the authority that partners have to perform acts that are necessary for carrying on the ordinary business of the firm. However, there are certain limitations to this authority, and one such limitation is that a partner cannot enter into a partnership on behalf of the firm.
Explanation:
Opening a bank account on behalf of the firm (Option A):
- Partners have the implied authority to open a bank account on behalf of the firm as it is essential for the smooth functioning of the business. This allows the firm to receive and make payments, manage finances, and carry out other banking transactions.
Engaging and discharging employees (Option B):
- Partners have the implied authority to engage and discharge employees on behalf of the firm. This authority is necessary to hire and manage the workforce required for the firm's operations. Partners are responsible for the day-to-day management of the firm, including personnel decisions.
Accepting any amount of debts due to the partnership firm (Option C):
- Partners have the implied authority to accept debts on behalf of the partnership firm. This means that they can borrow money or take loans in the name of the firm to finance its operations or other business needs. This authority is crucial for the firm's financial stability and growth.
Entering into a partnership on behalf of the firm (Option D):
- Partners do not have the authority to enter into a partnership on behalf of the firm. Partnership is a contractual relationship between two or more individuals who agree to carry on a business together. It requires the mutual consent and agreement of all the partners involved. Therefore, a partner cannot unilaterally enter into a partnership on behalf of the firm without the consent of the other partners.
Conclusion:
The correct answer is option D, as a partner does not have the authority to enter into a partnership on behalf of the firm. This decision requires the agreement of all the partners involved and cannot be made by an individual partner alone.
Explanation:
Opening a bank account on behalf of the firm (Option A):
- Partners have the implied authority to open a bank account on behalf of the firm as it is essential for the smooth functioning of the business. This allows the firm to receive and make payments, manage finances, and carry out other banking transactions.
Engaging and discharging employees (Option B):
- Partners have the implied authority to engage and discharge employees on behalf of the firm. This authority is necessary to hire and manage the workforce required for the firm's operations. Partners are responsible for the day-to-day management of the firm, including personnel decisions.
Accepting any amount of debts due to the partnership firm (Option C):
- Partners have the implied authority to accept debts on behalf of the partnership firm. This means that they can borrow money or take loans in the name of the firm to finance its operations or other business needs. This authority is crucial for the firm's financial stability and growth.
Entering into a partnership on behalf of the firm (Option D):
- Partners do not have the authority to enter into a partnership on behalf of the firm. Partnership is a contractual relationship between two or more individuals who agree to carry on a business together. It requires the mutual consent and agreement of all the partners involved. Therefore, a partner cannot unilaterally enter into a partnership on behalf of the firm without the consent of the other partners.
Conclusion:
The correct answer is option D, as a partner does not have the authority to enter into a partnership on behalf of the firm. This decision requires the agreement of all the partners involved and cannot be made by an individual partner alone.
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The implied authority of a partner in a firm does not empower him to :a)Open a bank account on behalf of the firmb)Engaging and discharging employeesc)Accepting any amount of debts due to the partnership firmd)Enter into partnership on behalf of the firmCorrect answer is option 'D'. Can you explain this answer?
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