New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Once all the partners anticipate dissolution of the

    firm___.
    A They may enter into an agreement restraining entering into any business. Correct Answer Incorrect Answer
    B They may enter into another similar business. Correct Answer Incorrect Answer
    C They may enter into an agreement that they will not carry out any similar business like that of the firm. Correct Answer Incorrect Answer
    D A or B. Correct Answer Incorrect Answer
    E A, B and C. Correct Answer Incorrect Answer

    Solution

       Partnership Act  S.54 AGREEMENTS IN RESTRAINT OF TRADE. Partners may, upon or in anticipation of the dissolution of the firm, make an agreement that some or all of them will not carry on a business similar to that of the firm within a specified period or within specified local limits and notwithstanding anything contained in section 27, of the Indian Contract Act, 1872, such agreement shall be valid if the restrictions imposed are reasonable.

    Practice Next

    Relevant for Exams: