a. P is bound to pay Rs.20,000 along with profit of Rs.5,000 to the firm because this amount belongs to the firm.
Explanation: According to the principal and agent relationship, P is principal as well as agent to the firm and to Q and R. As per the rule, any profit earned by an agent (P) by using the firm’s property is attributable to the firm.
b. Q is liable to pay Rs.5,000 to the firm. According to the Partnership Act, every partner of a partnership firm is liable to the firm for any loss caused by his/her wilful negligence.
Explanation: Here, Q is solely responsible for the loss of Rs.1,000 because he used the property of the firm and also represented himself as a principal rather than an agent to the other partners and to the firm.
c. P and Q may buy goods from A Ltd.
Explanation: According to the Partnership Act, a partner has a right to buy and sell goods without consulting the other partners unless a Public Notice has been given by the partnership firm to restrict the partners to buy and sell.
d. C will not be admitted because one of the partners, P, has not agreed to admit C. Explanation: According to the Partnership Act, a new partner cannot be admitted into a firm unless all the existing partners agree on the same decision. In other words, a new partner can be admitted in a partnership firm with the consent of all the existing partners.
