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Partnership 3 - registration of a partnership firm - class-XI

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The relationship of partnership arises out of ________________.

  1. an agreement

  2. statue

  3. operation of law

  4. both an agreement and statue


Correct Option: A

Which of the following is NOT required to be maintained in the partnership deed? 

  1. Age of partners

  2. Name of partners

  3. Address of partners

  4. Firm name


Correct Option: A

The written agreement of partnership is called ___________.

  1. partnership deed

  2. article of association

  3. memorandum of association

  4. certificate of incorporation


Correct Option: A

Registration of partnership is ________.

  1. Compulsory

  2. Not compulsory

  3. Compulsory if its turnover exceeds specified amount

  4. Compulsory if it is liable to tax audit under the Income Tax Law.


Correct Option: B

If the partnership agreement is in __________ it is known as a "Partnership Deed".

  1. Verbal

  2. Written

  3. Implied

  4. Verbal, written or implied


Correct Option: B

Which of the following is not the requirement in Partnership deed?

  1. Capital contribution by each partner

  2. Profit sharing

  3. Total assets of the partner

  4. Method of dissolution


Correct Option: D

Which of the following is essential of partnership deed?

  1. It should be made legally

  2. It should be enforceable

  3. It should be a written agreement between two or more persons

  4. It should be forbidden by law


Correct Option: C

Partnership Deed is also called as ______.

  1. partnership document

  2. articles of partnership

  3. both of these

  4. none of the above.


Correct Option: B

Which of the following purpose is a form in which all the Partners are signed?

  1. Pronote

  2. Partnership Deed

  3. MOA

  4. None


Correct Option: B

In the absence of partnership deed partners are entitled to ________.

  1. salary

  2. interest on loan

  3. Interest on capital

  4. share of profits in capital ratio


Correct Option: B

An unregistered Firm cannot file a suit against a __________ to enforce any right arising from a contract.

  1. partner

  2. minor admitted to benefits of Partnership

  3. third Party

  4. outgoing Partner.


Correct Option: C

Application for Registration of Firms should be signed by ____________.

  1. all the Partners or their agents.

  2. majority of the Partners or their agents.

  3. all Working Partners or their agents.

  4. all Minor Partners.


Correct Option: A

Any Statement, Intimation or Notice recorded or noted in the Register of Firms shall, as against any person be  __________ of any fact therein stated.

  1. prima facie proof

  2. collaborative proof

  3. inclusive proof

  4. conclusive proof.


Correct Option: D

Application for rectification of mistake in the documents or the Register of Firms shall be made by _________.

  1. any one Partner or his agent.

  2. majority of the Partners or their agents,

  3. all Working Partners or their agents.

  4. all the Partners or their agents.


Correct Option: D

An unregistered firm is not ______________.

  1. a Legal association

  2. an Illegal association

  3. an Association of person

  4. none of the above


Correct Option: B

Unregistered firm cannot file a suit against__________ to enforce any right arising from a contract.

  1. incoming partner

  2. outgoing partner

  3. minor admitted to benefits of the firm

  4. all of the above


Correct Option: D

The Register of Firms shall be open to inspection by ____________.

  1. the registrar of Firms.

  2. partners of the Firm.

  3. creditors of the Firm.

  4. any person.


Correct Option: D

The Registrar of Firms is appointed by __________.

  1. Central Government

  2. State Government

  3. Central and State Government

  4. Chief Justice of India.


Correct Option: B

If a firm wants to register itself, if will go to ___________.

  1. registrar of firms

  2. registrar of companies

  3. court

  4. any of these


Correct Option: A

Non-registration of the Firm does not affect the right of the Firm to institute a suit or claim of set-off not exceeding ________.

  1. Rs. 100

  2. Rs. 1,000

  3. Rs. 10,000

  4. Rs. 50,000.


Correct Option: A

The unregistered firm does not have a ____________.

  1. right to file a suit on third party

  2. right to acquire property

  3. right to transfer property

  4. all of the above.


Correct Option: A

Which of the following is not effected due to Non-registration of a firm?

  1. Suit by third party

  2. Official receiver's right to recover the property of insolvent partner

  3. Partner's right to suit for dissolution of firm

  4. All of the above


Correct Option: D

In case of Unregistered Firms, public notice is given in the following manner ____________.

  1. publishing the Notice in the Official Gazette.

  2. publishing the Notice in one vernacular newspaper circulating in the district where the Firm's principal place of business is situated.

  3. either (a) or (b).

  4. both (a) and (b).


Correct Option: D

Which of the following does not require public notice in case of a Registered Firm?

  1. Admission of a Partner

  2. Retirement of a Partner

  3. Expulsion of a Partner

  4. Dissolution of the Firm.


Correct Option: A

When a partnership is not registered, a partnership firm is___________.

  1. deemed to be an illegal association and is allowed to carry on business.

  2. allowed to carry on business, subject to payment of penalty.

  3. allowed to carry on business, subject to certain disabilities.

  4. allowed to continue the business.


Correct Option: C

The name under which partnership business is carried on is called _________.

  1. Firm name

  2. Firm

  3. Business name

  4. Owners name


Correct Option: A

As per Section $(2)$b of the Act the term "business" includes every __________________.

  1. Trade

  2. Trade and Occupation

  3. Trade, occupation and profession

  4. Trade, occupation, profession and art


Correct Option: C

Sharing of profits is _________ evidence of the existence of partnership.

  1. Not a conclusive

  2. Prima facie

  3. Acceptable

  4. Collaborative


Correct Option: B

Which of the following act is within the implied authority?

  1. Enter into partnership on behalf of the firm

  2. Submit to arbitration, a dispute relating to the business of the firm

  3. Pledging goods of the firm as security

  4. Open a bank account on behalf of the firm in the partner's own name


Correct Option: C

Which of the following act is within the implied authority?

  1. Acquire immovable property on behalf of the firm

  2. Borrowing money on behalf of the firm

  3. Enter into partnership on behalf of the firm

  4. Transfer immovable property belonging to the firm


Correct Option: B

To form a partnership, the parties should share ________.

  1. Only losses

  2. Only profits

  3. Both profits and losses

  4. Profits and losses but some partners may get a share only in the profits


Correct Option: D

Which of the following is not required to be given in an application for registration of a Firm?

  1. Firm name

  2. Place of business or principal place of business

  3. Names of any other places where the firm carries on business

  4. Details of capital contribution of partners


Correct Option: D

Application for registration of firms should be signed by _____________.

  1. All the partners or their agents

  2. Majority partners or their agents

  3. All working partners or their agents

  4. All minor partners


Correct Option: A

Identify which of the following statement is true and which is false.
P. Registration of firm does not create partnership, but is only the evidence of existence of partnership.
Q. A partnership firm has to be compulsorily registered in order to commence its business.
R. Registration of firm may be effected at any time during the continuance of partnership.
Select the correct answer from the options given.

  1. P-True, Q-False, R-True

  2. P-False, Q-True, R-True

  3. P-True, Q-True, R-False

  4. P-False, Q-False, R-True


Correct Option: A

Which of the following is NOT required to be given in an application for registration of a firm?

  1. Firm name

  2. Date when each partner joined the firm

  3. Date of birth of each partner of the firm

  4. Duration of the firm


Correct Option: C

If a firm wants to register itself, it will go to __________.

  1. Registrar of Firms

  2. Registrar of Companies

  3. Court

  4. Any of the above


Correct Option: A

Register of Firm shall be open to inspection by _______________.

  1. The Registrar of Firms

  2. Partners of Firm

  3. Creditor of the Firm

  4. Any person


Correct Option: D

Application for rectification of mistake in the documents or the Register of firms shall be made by _________________.

  1. Any one partner or his agent

  2. Majority of partners or their agent

  3. All working partner or their agents

  4. All the partners or their agents


Correct Option: D

A partner may retire from an existing firm __________________.

  1. With consent of all partners

  2. As per express agreement

  3. By written notice in partnership at win

  4. All of the above


Correct Option: D
Explanation:
Every partner is an agent of the partnership firm. Individuals have to enter into a contract to become partners. A partner may retire from an existing firm:a) With consent of all partners
b) As per express agreement
c) By written notice in partnership at win.

Interest on capital will be allowed only when _________________.

  1. There are heavy losses in the firm

  2. There are no profits and no losses

  3. There are profits

  4. Always


Correct Option: C
Explanation:

Interest on capital will be allowed only when there are profits. Interest on capital is only given to partners when there are profits. In case of losses, partners are not given interest on capital. Interest on capital can be defined as the amount charged as interest on partner's capital.

Partnership agreement can be __________.

  1. Oral

  2. Written

  3. Oral or written

  4. None of these


Correct Option: C
Explanation:

Partnership agreement can be oral or written. Some individuals have to enter into a contract or agreement in order to become partners in a partnership firm. Partnerships are the only business entities that can be formed by oral agreement as well as written agreement.

When it is not registered, a partnership firm is ________.

  1. deemed to be illegal organization and disallowed to carry on business

  2. allowed to carry on business subject to payment of penalty

  3. allowed to carry on business subject to certain disabilities

  4. all of the above


Correct Option: C
Explanation:
If the partnership firm is not registered, it has to remain deprived of following advantages:
  1. No partner can take any legal action against any other partner.
  2. No partner can intimate proceedings against the firm in order to get his rights.
  3. The firm, too,cannot start proceedings against any partner.
  4. The firm cannot proceed against other parties, while the other parties can proceed against the firm.

Which of the following is not required to be mentioned in the partnership deed?

  1. Age of partners

  2. Name of partners

  3. Address of partners

  4. Firm name


Correct Option: A
Explanation:

To become a partner it is not necessary to mention the age but  to become a partner you need to be a major and should be of sound mind . However, a minor can also become a partner. In such a scenario, all the partners should give their consent in order to admit a minor.

The written agreement of partnership is called ________________.

  1. partnership deed

  2. articles of association

  3. memorandum of association

  4. certificate of incorporation


Correct Option: A
Explanation:

Partnership is created by an agreement between the parties. The agreement may be in writing or by words of mouth or implied by the conduct of the parties. However, it is always desirable for the partners to have the agreement in writing. 

The document in writing should contain the important terms of partnership as agreed upon by the partners themselves to avoid any future dispute. So the document in writing containing the terms and conditions as agreed between the partners is called partnership deed.

Which property will be the property of a firm?

  1. The movable and immovable property of the firm

  2. Property brought in by a partner and is vested in the firm

  3. Property brought in by partner and is being used in partnership business

  4. Both a and b


Correct Option: D
Explanation:

Subject to contract between the partners, the property of the firm includes all movable and immovable property, rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm or for the purposes and in the course of business of the firm, and includes also the goodwill of the business. And any property brought in by a partner and vested in the firm will be considered as the property of the firm.

Which of the following is not the requirement in Partnership deed?

  1. Capital contribution by each partner.

  2. Profit sharing.

  3. Total assets of the partner

  4. Method of dissolution


Correct Option: D
Explanation:

According to the provisions of the Indian partnership act. 1932, a partnership deed is an agreement which consists of the rights and responsibilities of the partners in the firm.

 It also includes capital contributed by the partner, profit sharing ratio, total assets of the partner.etc. It does not include the method of dissolution of the firm.

Voluntary registration is related with?

  1. HUF

  2. Partnership

  3. Sole-proprietorship

  4. Company


Correct Option: B
Explanation:

Voluntary registration is related to partnership firm.

According to part 7 of the Indian Partnership Act 1932, the registartion of the partnership firm is not complusary i.e it is voluntary,but it is complusary in the state of Maharashtra for 1960.

Agreement to share profits in a partnership firm ___________.

  1. must be coupled with an agreement to share losses

  2. is same as agreement to share losses

  3. implies an agreement to share losses

  4. does not necessarily mean an agreement to share losses


Correct Option: C
Explanation:

As per Section $4$ of The Indian Partnership Act, $1932$ "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Each person contributes money, property, labour or skill and expects to share in the profits and losses of the business.

The partners enter into partnership through an agreement which may be _________.
(I)    Verbal
(II)   Written 
(III)  Implied 
 The correct answer is :-

  1. (II) only

  2. (I) or (II)

  3. (II) or (III)

  4. (I) or (II) or (III)


Correct Option: D

When can the registration of the firm can be done?

  1. Prior to the formation of the firm

  2. At the time of formation of the firm

  3. Anytime during its existence

  4. Both B & C


Correct Option: D

To avoid misunderstanding between the partners, the partners need  _________________.

  1. clear mutual understanding

  2. clear communication between partners

  3. clear agreement of terms and conditions

  4. clear objectives


Correct Option: C

A partnership  deed is a _________________.

  1. involuntary association

  2. voluntary association

  3. beneficiary association

  4. unavoidable association


Correct Option: B

The application of the registration of the firm should be signed by ____________.

  1. any one of the partner

  2. two or more partners

  3. all the partners of the firm

  4. partner that represents all other partners


Correct Option: C

The consequences of non-registration of a firm are ______________.

  1. a partner of an unregistered firm cannot file a suit against the firm or other partners,

  2. the firm cannot file a suit against third parties

  3. the firm cannot file a case against the partners

  4. all of the above


Correct Option: D

__________ constitutes as an evidence of agreement.

  1. Oral agreement

  2. Written agreement

  3. Mutual understanding

  4. Similar objectives


Correct Option: B

Partnership is an agreement between _______________.

  1. entities in a business

  2. two people

  3. organisations

  4. friends


Correct Option: A

Which of the following are included in a partnership deed?

  1. Duties and obligations of the partners

  2. Distribution of profits and losses

  3. Terms governing admission,retirement and expulsion of a partner

  4. All of the Above


Correct Option: D

Partnership business in India is governed by India Partnership Act of ____________.

  1. $1913$

  2. $1932$

  3. $1984$

  4. $1928$


Correct Option: B

In the absence of an agreement profit and loss are divided by partners in the ratio of __________.

  1. capital put by members

  2. equally amongst all the partners

  3. time devoted by each partners

  4. none of these.


Correct Option: B

An unregistered firm can bring an action in criminal court against ________________.

  1. a partner who steals the property of the partnership firm

  2. a partner who purposely damages the property of the partnership firm

  3. A&B

  4. none of the above


Correct Option: C

E-form no 18 is filled for _____________________.

  1. registered address, of company

  2. head office address, of company

  3. regional office address of company

  4. fall the address of company


Correct Option: A

For the formation of the contract of sale of goods, there should be ________________.

  1. two parties

  2. one party

  3. more than 2 parties

  4. both A & B


Correct Option: A

An agreement of agency must make clear the _______of a person to act on behalf of another person.

  1. intention

  2. certainty

  3. involvement

  4. none of the above


Correct Option: C

All the agreements are contracts _____________.

  1. if they are on stamp paper

  2. if they are made by the free consent of parties

  3. if they are registered

  4. all of these


Correct Option: D

Sec. 25 companies should pay stamp duty for registering MOA and AOA _______________.

  1. Yes

  2. No

  3. Not specified

  4. None of the above


Correct Option: B

Unregistered firm can bring an action in any court of Law against ________________.

  1. A partner who steals the property of the firm

  2. A partner who purposely damages the property of the firm

  3. Both a and b

  4. None of the above


Correct Option: C

One out of the below mentioned statements is false. Pick it ________________.

  1. A registered company whose members have a liability limited, at the time of winding up of company their liability becomes unlimited.

  2. A publicly owned company is a company whose shares are held by public.

  3. When companies shares are held by individuals who are associated with the management of firm it is closely held company.

  4. When a company gods public its true market value is revealed


Correct Option: A

If the remaining partner want to continue the business, after the retirement of a partner, a new partnership agreement__________.

  1. necessary

  2. not necessary

  3. optional

  4. none of above


Correct Option: A

The partnership deed is also called as _______________.

  1. Partnership agreement

  2. Constitution of partnership

  3. Articles of partnership

  4. All of the above


Correct Option: D
Explanation:

According to the Partnership Act, 1932 the relation between the partners of a partnership firm can only be created through a mutual agreement between the partners which will be presented in the manner of contract that can be verbal as well as written also. But nowadays written is given more preference due to legal requirements. The written partnership agreement which has all rules and regulations implied on all the partners mention thereof is called partnership deed. A partnership deed is also called partnership agreement or constitution of partnership or articles of partnership. 

Registration of partnership is _________.

  1. Compulsory

  2. Not compulsory

  3. Compulsory if its turnover exceeds specified amount

  4. Compulsory if it is liable to tax audit under the Income Tax Law


Correct Option: B
Explanation:

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. 

Under Partnership Act, 1932 registration of partners and the partnership firm is not compulsory however it is advised to get the firm registered for many legal requirements.

Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to _________ of his intention to dissolve the firm.

  1. Any one of the partner

  2. All the other partners

  3. Two partners

  4. Three partners


Correct Option: B
Explanation:
The partnership which is started at the will of the partners where the firm stands dissolved whenever the partners want it to as there is no fixed period or provision regarding the business duration and determination of the firm. Such a type of partnership is known as partnership at will. Any partner can dissolved the firm by giving a prior notice regarding the dissolution mentioning a legitimate reason behind the dissolution.

Registration of partnership is not compulsory but registration of company is __________.

  1. Optional

  2. Compulsory

  3. Compulsory in some cases

  4. Optional but compulsory in some cases


Correct Option: B
Explanation:

A company is a separate legal artificial body with a name and common seal by the law. According to the Companies Act, 2013, it is compulsory for all the companies to register under the companies act with their memorandum of association.

Where a partnership firm is formed for a particular undertaking or undertakings, it proceeds to carry on other undertaking or undertakings, in that event the mutual ________ of the partners in respect of the other adventures or undertakings are the same as those in respect of the original adventures of undertakings.

  1. Rights

  2. Duties

  3. Rights and duties

  4. Duties & liabilities


Correct Option: C
Explanation:

 A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. So if the partnership is started for a specific undertaking, then it is the rights and duties of all the partners to carry on that undertaking with respect to all the other relevant undertakings. 

A partner claim interest on capital __________.

  1. Even if there is loss

  2. If there is profit

  3. If there is profit and there is an agreement to pay it

  4. Whether there is profit or loss to the firm


Correct Option: C
Explanation:

According to the Partnership Act 1932, every partner has an equal right to participate in the conduct and management of the business and has an equal share in the profit or loss of the firm, mentioned otherwise. 

Partner shall indemnify the firm for any loss caused to it but his _______ in the conduct of the firm's business.

  1. Negligence

  2. Interference

  3. Willful neglect

  4. Honesty


Correct Option: C
Explanation:

According to the Partnership Act 1932, the partners those are in agreement with the partnership deed who are taking part in the conduct of business and management of the firm are not entitled to receive any remuneration of any sort. 

ABC & Co., a firm consists of three partners A, B and C having one-third share each in the firm. According to A and B, the activities of C are not in the interest of the partnership and thus want to expel C from the firm. Advise A and B whether they can do so ___________.

  1. Yes

  2. No

  3. A & B have to retire from the firm

  4. Yes, but subject to permission of C


Correct Option: A
Explanation:

According to the Partnership Act 1932, the partners those are in agreement with the partnership deed can expel any partner with majority if the acts of the partners are not in the good faith of the business. Therefore, A and B can do so under partnership act 1932. 

Which of the following is not covered by the term "Property of the firm".

  1. Property and rights and interest in property originally brought into the stock of the firm

  2. Property acquired by or for the firm

  3. Goodwill of the business

  4. Property of the partners


Correct Option: D
Explanation:

Property of the partners is not covered by the term "Property of the firm". Partners can carry on the business of partnership firm only with the properties which belongs to the firm and not with their personal property. Partners of the firm belongs to a  separate domain from the property of the partners,

If profit sharing ratio is not specified in the partnership deed, then the profit is shared ______.

  1. Equally

  2. According to the seniority of age

  3. According to capital contribution

  4. According to qualification.


Correct Option: A
Explanation:

If profit sharing ratio is not specified in the partnership deed, then the profit is shared equally. The partners can share profits in any agreed ration but in the absence of an agreement, they share the property equally, that means,the amount of the profit received by each of the partners will be equal.

If a firm wants to register itself, it will go to "______".

  1. Registrar of Firms

  2. Registrar of Companies

  3. Court

  4. Any of these


Correct Option: A
Explanation:

 If a firm wants to register itself, it will go to Registrar of Firms. An application and the prescribed fees are required to be submitted to the Registrar of Firms of the State in which the firm is situated in order to register the firm.

To constitute a partnership agreement, it _____________.

  1. Must be in writing

  2. Can be oral or written

  3. Either oral or written

  4. Only oral


Correct Option: B
Explanation:

To constitute a partnership agreement, it can be oral or written. In absence of partnership agreement, partners share the profits and losses equally. Partnership Agreement can be defined as a contract between two or more business partners that is used to establish the responsibilities, and profit and loss distribution in a partnership firm.

Share in partnership can be transferred by consent of ______ the partners.

  1. All

  2. Majority

  3. No consent required

  4. None of these


Correct Option: A
Explanation:

Share in partnership can be transferred by consent of all the partners. Partners are the agents of the partnership firm who all carry on the business related activities in a partnership entity. A partner does not have any right to sell the share in partnership without the consent of all the partners.

What is a Partnership?

  1. An agreement between persons

  2. An association of person

  3. A body of individuals

  4. All of the above


Correct Option: A
Explanation:

Partnership is an agreement between persons. Partnership is an association of 2 or more individuals but not more than 20 who agree to share the profits of a lawful business which is managed and carried on either by all or by any, or some of them acting for all. 
Partnership can be defined as a type of unincorporated business organization  in which multiple individuals, called general partners, manage the business and are equally liable for its debts' other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments.

If profit sharing ratio is not specified in the partnership deed, then the profit is shared ________________.

  1. Equally

  2. According to the seniority of partners

  3. According to the capital contribution

  4. According to qualification.


Correct Option: A
Explanation:

If profit sharing ratio is not specified in the partnership deed, then the profit is shared equally. The partners can share profit in any ratio. But in the absence of an agreement, they share profits equally.

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