Multiple choice

The authority of a partner to bind the firm by his acts done in the usual course of business is called his ‘implied authority’. Such authority does not include

  1. selling the firm’s goods

  2. to borrow in a trading firm

  3. settling accounts with the persons dealing with the firm

  4. withdraw a suit or proceeding filed on the firm’s behalf
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under Section 19 of the Partnership Act, 1932, a partner's implied authority includes acts in the usual course of business such as selling goods, borrowing on behalf of a trading firm, and settling accounts with persons dealing with the firm. However, withdrawing or compromising a suit or proceeding filed on the firm's behalf requires express authority as it is a matter of grave legal significance beyond ordinary business operations.

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