Multiple choice

Section 27 of the partnership Act states the liability of the firm for the misapplication by the partners.

  1. True

  2. False

  3. Partly true

  4. Cannot say
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A Correct answer
Explanation

Section 27 of the Partnership Act imposes liability on the firm for misapplication of money or property by partners. When a partner misappropriates funds entrusted to them in the course of business, the firm is liable to make good the loss. This protects third parties who deal with the firm in good faith.

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