Multiple choice

State which of the following is correct?

  1. There is not much difference in the nature of a partnership from the nature of a HUF.

  2. There is considerable difference in the nature of a partnership from the nature of a HUF.

  3. There is difference in the nature of a partnership from the nature of a HUF because unlike the nature of a HUF, the nature of a partnership is voluntary and contractual.

  4. There is not much difference in the nature of a partnership from the nature of a HUF because both involve a certain interest of a particular individual.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A partnership is fundamentally a voluntary, contractual relationship between parties who agree to carry on business together. In contrast, a Hindu Undivided Family (HUF) arises by operation of Hindu law - it's automatic, hereditary, and not based on any agreement. This core difference in origin makes C the correct answer.

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