Q.Which statement correctly describes the legal status of a partnership firm under the Indian Partnership Act, 1932?
(A) A firm is a separate legal entity, distinct from its partners, exactly like a registered company
(B) A firm has no separate legal entity — the firm name is merely a compendious name for all the partners collectively
(C) A firm enjoys perpetual succession, unaffected by the death or retirement of a partner
(D) A firm's property belongs to the firm itself, not to the partners

Unlike a company, a partnership firm has no legal personality separate from its partners — this is the key legal-status distinction tested throughout this unit.

Why (B) is correct: Unlike a company incorporated under the Companies Act, 2013, a partnership firm has no legal existence separate from its partners. The 'firm name' is only a convenient, collective way of referring to all the partners together.

Why the distractors are wrong:

• (A) and (D) wrongly ascribe company-like separate legal personality and property ownership to a firm — the firm's property actually belongs jointly to the partners, not to any separate 'firm' entity. …

Students who have already studied Company Law (the very next unit in this syllabus) sometimes wrongly transfer company concepts — separate legal entity, perpetual succession, limited l …