Multiple choice

Profits of a partnership firm must be distributed among the partners as per the partnership deed, while the profits of a company

  1. must be distributed to its shareholders

  2. may or may not be distributed to its shareholders

  3. may or may not be distributed to its board of directors, shareholders and other stakeholders

  4. are not distributable at all
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (2) is correct: It is not an obligation for the company to distribute profits among the shareholders.

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