Question

Pick the incorrect statement.

• A. A partner in possession of more information about the affairs and assets of the firm should not disclose to his co-partners.
• B. Every partner should indemnify the firm for any loss caused to it due to his fraud.
• C. A retired partner is not liable for acts of the firm done before his retirement.
• D. Every partner should use the property of the firm for firm’s purposes only.

Hint:

Partnership = mutual trust and disclosure; hiding info breaches fiduciary duty.

Answer 1

The Correct Option is A

Step 1: Fiduciary duty of partners.
The Indian Partnership Act, 1932 (s.9) requires partners to act honestly and render true accounts and full information to any partner or his legal representative.
Step 2: Why (a) is incorrect.
(a) states the opposite — partners must disclose, not hide, material information.
Step 3: Other options.
(b) Correct — s.10 imposes indemnity obligation for fraud.
(c) Wrong in law — actually, a retired partner is liable for acts before retirement unless released by agreement (so statement (c) is factually incorrect in general law, but within question framing, (a) is most clearly “incorrect”).
(d) Correct — property to be used only for firm purposes (s.15). \[ \boxed{(a)} \]