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Introduction to Death of Partner

A partnership...

Question

A partnership firm has no separate existence apart from its members. Whereas a company is a ___________ distinct from its member.

A

Do not have separate legal entity

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B

Separate legal entity

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C

Non-profit making organization

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D

None of the above

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Solution

The correct option is B Separate legal entity
A company has a separate legal artificial body with a name and common seal by the law. Therefore, its existence does not depend upon the existence of its owners that is the shareholders and the company is not affected by the death, disability and insolvency of its shareholders. Therefore, company has a separate legal entity.

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