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Which of the following statements correctly distinguishes a partnership firm from a company under Indian law?
Answer & Solution
Correct answer: A.
1. The Lesson 1 table on "Distinction between Partnership Firm and Company" lists the property-ownership rule among the cardinal differences.
2. In a partnership, the property of the firm is the property of the individuals comprising it; in a company, the property belongs to the company, not its members.
3. Partners' liability is unlimited; members' liability is limited (by shares or guarantee) — the reverse of (B).
4. A partner can transfer his share with the consent of others; company shares are ordinarily transferable. A company has perpetual succession; a partnership dissolves on a partner's death — the reverse of (D).
_Source: ICSI CS Executive Paper 2 (Company Law) — Lesson 1: Introduction to Company Law, pp. 2-35._
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