CS Professional · CSR and Social Governance · Partnership Firms
Neha and Omkar, both members of a Hindu undivided family running a family trading business, agree by contract to enter into a separate, single venture of supplying one lot of rice to a government agency and to share its profits. Which statement is correct?
They can be partners in that one venture. A person may become a partner in particular adventures or undertakings, and partnership arises from contract, not status. Their HUF membership only bars partnership in the family business carried on as such, not in a separate contractual venture.
- AThey can be partners in that particular venture, since a person may become a partner in particular adventures or undertakingsCorrect
- BThey cannot be partners because they belong to an HUF
- CThey become partners in the entire family business as well
- DThey are partners only if the venture is continuing and not a single adventure
Explanation
Section 8 permits a person to become a partner with another in particular adventures or undertakings. Section 5 bars partnership only in the family business carried on as such. The separate contract for the rice venture creates a partnership limited to it.
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