Partnership
1.
Partnership is formed to share:
a.
Investment in business
b. Profit
and loss in business
c.
Properties in business
d. None
Ans -
B
2.
Partnership is a
a.
Company
b. Joint
venture
c.
Business
d. Firm
Ans-D
3.
What points are true about partnership
1.Partners
and partnership firms are the same in the eyes of law
2.Partners
are agents to each other
3.If
a partner commits a fraud, all other partners are also liable
4.If
partnership fails all partners are individually and personally liable
a) 1,2 and 3
b) all true
c)All false
Ans-B
4.
A and B are Partners but the deal does not say
anything about sharing of profits. A invested all the Capital and B manages the
entire business. How will they share profits
a.
100:0
b. 50:50
c.
A gets 100% of profit and B gets salary for
management
d. 75:25
Ans- B;
explanation-
Law prescribes 50:50 in the absence of profit sharing in the deal
5.
P and Q jointly owned a house and lived with
50/50 rights. Common expenses like tax etc. are shared on a 50/50 basis. Is
this a -
a.
Partnership
b. Joint
venture
c.
Collective living
d. None
Ans – None
Explanation- When used
for a personal prpose, it is not a partnership business. If they rent the house
and share the rent it is a partnership.
6.
A and B joined together for the business to
construct a house for a third party, they finished the house within a year.
What is this partnership called-
a.
Partnership at will
b. Partnership
for a fixed period
c.
Particular partnership
d. None
Ans-C
Explanation
– 1.When partners join together for a specific purpose it is called a
‘particular partnership’
7.
LLP is Limited Liability Partnership, What is
not true about LLP?
a.
A body corporate under company law
b. Perpetual
and legal entity
c.
Liability is limited to partner’s capital
d. To
have minimum 2 partners and 2 designated partners
e. Central
government is the authority to investigate in LLP
f.
Governed by partnership act (1932)
Ans – F
Explanation- All points
except F are true. It is governed by company law
8.
Which one is not a true statement
a.
A company is dissolved by the high court
b. Partnerships
are dissolved by consent of all partners or a court order
c.
LLP dissolved by the high court
d. Proprietorship
dissolved by the will of the owner
Ans –c
Explanation – LLP can
be dissolved by the consent of all partners or by National Company Law Tribunal
9.
One of the partners made secret profits by
selling the firms goods at a higher rate and pocketed the extra amount. A
customer complained to the firm. Which is not true below?
a.
Fraudulent partner is liable
b. Each
partner is liable
c.
Damages are to be recovered from the fraudulent
partner
d. Other
partners waived of the damages and merely warned the partner considering the
extraordinary salesmanship of the fraudulent partner.
Ans – D
Explanation –
Fraudulent partner is liable and further he is liable to all the other partners
for the for the damages borne by firm because of his fraudulent action
10.
Firm ACBCD agreed to give all the administrative
powers to to D and A,B and C are to remain sleeping partners. Which one is true
about this from the following statements?
a.
If D
committed a fraud sleeping partners are liable
b. D
can take actions as per contract terms
c.
A,B and C have powers to inspect and question
the business
d. Any
partner can stop operation of account in bank
e. All
of the above
Ans –
E
11.
A, B, C and D did not have any clause in partnership
agreement on interest on capital and sharing of profits.
What is true from the
following?
a.
Profit equally shared (25% each)
b. 6%
interest ‘only on extra capital’ brought in by all partners as per partnership
act
c.
Interest paid only if profits are made
d. All
Answer: d
12.
D bought a property for the firm (He is not
empowered to buy unless with the consent of all partners). The result is
___________
a.
D is to own it personally, and cost is to be
returned to firm
b. A,B
and C the other partners cannot approve it
c.
D is to sell the property and bring the money back to firm
d. Property
in the name of the firm cannot be sold by any partner without the consent of
partners
Ans – d
Explanation- Partners
individually cannot buy/sell property, file or withdraw a suit, or admit a case
against them. A property can be bought even without consent; but after purchase
for sale it requires consent from all.
13.
A partner plays two roles,
a.
Partner and owner
b. Seller
and owner
c.
Agent and principal
d. Buyer
and seller
Ans – c
Explanation- A partner
on his own is a principal and at the same time represents other partners as an
agent in all transactions
14.
ABC and D are partners. E is a close friend of B
and D, he used to come to the firm regularly and handle all sales and
purchases. ABCD became liable for rupees one crore to F, who was a customer. F
went to court against ABCD and E too.
a.
E is not liable as he is an outsider
b. E
only is liable because he took part in
business and sold things to F
c.
Only ABCD are liable as they are partners as per
deed
d. ABCD
and E are all liable
Ans- D
Explanation - As per ‘doctrine of holding out’ an outsider who behaves like a partner will be
held liable like any other partner.
15.
Partner A transferred his interest to his son S,
What are the rights of S, S cannot -
a.
Interfere in day-to-day business
b. Be
liable to laws beyond his capital in business
c.
S has rights to profit only
d. All
of the above
Ans – C
Explanation -
transferee has only the right to receive share of profits; if any loss occurs transferee’s
liability is limited to share of capital, His personal estates are not liable
to loss.
16.
A minor became a partner of ABC firm. What is
the position of the minor
a.
A minor has no authority to contract
b. If
he becomes a partner, he has rights to benefits only
c.
He is liable to the extent of his share only
d. On
attaining majority he has to acknowledge his partnership within six months
e. All
of the above
Ans
–E
Explanation: A minor cannot be a party to contract. If at
all he becomes a party to it, he is eligible for profits and benefits only. On
attaining 18 years, he has to acknowledge or refute the contract within 6
months. If he fails to acknowledge or refute, automatically he becomes a party
to contract in the eyes of law from attaining majority.
17.
C gave a notice of retirement to the firm. Which
is not true below?
a.
All the partners have to give consent for
retirement
b. In
partnership at will, notice is enough
c.
Operation of bank account should be stopped and
a new account in the name of remaining partners will be opened.
d. The
partner cannot be expelled
Ans-D
Explanation-Partners
need to give a public notice for retirement or resignation after acceptance of
it by other partners. But in partnership at will, it is enough that partner can
leave by giving notice at his will.
18.
D became insolvent in ABCD firm.
a.
Partnership cannot be continued and has to be
dissolved
b. Partnership
can continue without D
c.
In these circumstances Partnership is to act as
per agreement
d. None
of the above
Ans-C
Explanation: In
general, partnership is dissolved if any partner becomes insolvent. If the deed
says that it can continue even on the insolvency of a partner, the firm can
continue the business.
19.
ABCD had an agreement to continue the
partnership even after the exit of any of the partners. D was announced as
insolvent by the court. The due for the bank was one crore on that date.
a.
D’s properties are liable for the balance as on
the date of insolvency with other partners AB and C
b. ABC
can share this liability without the involvement of D
c.
ABCD are liable even after the insolvency of D
d. None
of the above
Ans – A
Explanation – Any
partner who is insolvent or resigned is also liable to firm and partners. But
he has to submit his details of capital and liabilities to court. Court
appoints a receiver to sell his properties and repay the dues including that of
firm.
20.
On which of the occasions a firm Is not
dissolved
a.
A partner becomes insolvent
b. A
partner dies
c.
All partners give consent for dissolution
d. All
partners become insolvent
e. Partnership
deed says that partnership can continue even when one of the partners die,
retire, or become insolvent.
Answer: e.
Explanation: A firm is
to follow the terms and conditions of partnership deed in these circumstances.
When all partners agree to dissolve the firm, it has to be dissolved.
21.
One of the partners is a minor admitted to the
benefits only, his guardian applied for dissolution in a court of law.
a.
A minor cannot file a suit
b. A
guardian cannot act in this case on behalf of minor
c.
Minor has the power to apply for the dissolution
through his partner
d. None
of the above
Ans - C
22.
A partner has to ____
a.
File a case in court for dissolution.
b. Issue
notice of retirement or resignation.
c.
A and B
d. None
of the above
Ans – C
In a partnership any
partner can issue a notice and leave the partnership. They can also come together
and dissolve the business. In case of dispute among them any one can go to
court for dissolution.
23.
ABCD, a firm has a deed but the firm is not
registered; what are the effects on the firm for non-registration?
a.
Partners cannot go to court against third parties
b. Partners
cannot go against each other to court
c.
Partners have only one right, apply for
dissolution in a court of law
d. Any
third party can file a suit against the firm
e. a
b c d
f.
a, c, d
Ans – E
Registration of the
firm requires that information about name, date, address, partners, firm, etc.
have to be registered in registrar of partnerships and a certificate of
registration is to obtained by them from Registrar of Firms.
Registration of deed is
giving legal status to deed/agreement only in sub-registrar’s office.
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