Multiple choice

Goodwill of the partnership business can be regarded as

  1. the property of the firm

  2. the property of the firm, subject to a contract between the partners to this effect

  3. the property of the firm, irrespective of a contract between the partners to this effect

  4. the property of the firm, subject to order of the High Court to this effect
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Goodwill is an intangible asset representing the reputation and customer connection of a business. In partnership law, goodwill belongs to the firm but the rights to it depend on what partners have agreed upon in their partnership deed. If the deed specifies how goodwill is treated on retirement/dissolution, that contract prevails. Option B correctly states goodwill is firm property subject to contract between partners. Option A incorrectly omits the contractual aspect, C wrongly states it's independent of contract, and D incorrectly involves High Court orders.

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