Multiple choice

A partner has paid a premium of Rs. 120000 on entering into partnership for a fixed term of 3 years. But after two years, the firm got dissolved. The partner claims Rs. 40000 premium refund. Is he eligible to get?

  1. True

  2. False

  3. Partly true

  4. Cannot say

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a partner pays premium for joining for a fixed term and the firm dissolves prematurely, the partner is NOT entitled to a proportional refund of premium. Premium is for the privilege of joining and is not refundable unless specifically agreed upon. The answer 'False' correctly denies the refund claim.