Multiple choice

Which of the following is correct?

  1. Liability of a partner in a partnership firm is unlimited

  2. Liability of a member of a HUF is unlimited

  3. Both of the above

  4. None of the above
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A Correct answer
Explanation

In a partnership firm, partners have UNLIMITED liability (jointly and severally). In HUF (Hindu Undivided Family), member liability is LIMITED to their share in ancestral/coparcenary property, not unlimited. The question correctly distinguishes between these two forms of business organization.

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