Question

Which of the following is not a legal characteristic of a general partnership? 

1. Unlimited liability of partners for partnership recourse debt 

2. Restricted transferability of partnership interests 

3. Centralized management 

4. Limited life 

5. All of the above are legal characteristics of partnerships.

Answer 1

Option (E) is correct

All the options given are legal characteristics of partnerships.

Option (A) : The liability of partners in a partnership is unlimited. They are collectively and individually liable for the debts of the partnership firm.

Option (B): A partner cannot transfer his share in the partnership.

Option (C) : The management of the partnership vests in the hands of partners. So, it is a centralized management.

Option (D): Partnership has limited life. A partnership comes to end as per the agreement or upon death or incapacity of the partner to carry out his responsibilities.

Answer 2

Answer

Option C

Centralized management

Explanation

Partnership means a group of persons who come together with a purpose to control and manage the operations of a business. The liability of the partners of a partnership firm is unlimited and they are liable to pay the liability of the business in full. Partnership doesn’t have the separate legal entity concept like a company. Their is restriction on the partner of a partnership firm to transfer his share without the consent of other partners. A partnership firm has a limited life as it will dissolve when the partners agree to shut the business. Also a single partner do any contract or run the operation of the firms.

hence, centralized management is not the characteristics of general prtnership