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Which statement about a partnership firm's legal status is CORRECT?
APartners' personal assets cannot be touched even on the firm's insolvency
BA partnership firm has a separate legal entity distinct from its partners
CA partnership firm has no separate legal entity apart from the partners constituting it
DPartners enjoy limited liability up to their capital contribution
Answer & Solution
Correct answer: C. A partnership firm has no separate legal entity apart from the partners constituting it
A firm has no separate legal personality (unlike a company). Hence partners' liability is unlimited — their personal assets can be used to pay firm debts.
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