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CS Professional · CSR and Social Governance · Partnership Firms

Anand, Bhavna and Charu run a trading firm in Pune. Their partnership deed is silent on how long the firm will last and on how it may be ended. Which statement correctly describes the firm?

The firm is a partnership at will. Section 7 says that where the partners' contract makes no provision for the duration of the partnership or for its determination, the partnership is at will. Silence in the deed on both points is exactly that situation.

  1. AIt is a partnership at will, because no provision is made by contract for its duration or determinationCorrect
  2. BIt is a particular partnership, because it was formed for trading
  3. CIt is a partnership for a fixed term of one year by default
  4. DIt cannot be dissolved until all partners agree in writing

Explanation

Under Section 7, where the contract makes no provision for the duration of the partnership or for its determination, it is a partnership at will. The nature of the business does not decide this. No default fixed term or unanimity requirement is stated in the provisions.

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