Question

A is admitted as a nominal partner in the firm of P, Q and R. He can become a partner by ______________________.

• A. Purchase of an interest from one or more of old partners
• B. Contributing cash to the partnership firm
• C. Contributing any other asset to the partnership
• D. Not contributing any asset to the partnership firm

Answer 1

Answer: (D)

Not contributing any asset to the partnership firm

Option D is the correct one.

Generally, a nominal partner is a well-known, well-connected individual who's name lends credibility and recognition to the firm. He is paid a fee for this service. A nominal partner is also known as a limited partner or ostensible partner.