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Partnership Act Test -4

Description: Partnership Act Test 4
Number of Questions: 15
Created by:
Tags: Partnership Act Test 4 Partnership Law
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Which of the following is not a right of a minor partner?

  1. To inspect the books

  2. To sue the other partners without leaving the firm

  3. To share the partnership property

  4. To become or not to become a partner on attaining majority


Correct Option: B
Explanation:

Option (2) is correct: As long as a minor is a partner, he cannot sue the other partners.

In a partnership, the liability of a partner is

  1. limited to shares in the partnership firm

  2. unlimited

  3. decided by the court

  4. decided by other partners


Correct Option: B
Explanation:

Option (2) is correct: The liability of a partner is unlimited for all acts of the firm done, while he is a partner.

Who among the following cannot become a partner in a partnership firm?

  1. A competent person

  2. An unmarried woman

  3. Non-resident Indian

  4. Alien enemy


Correct Option: D
Explanation:

Option (4) is correct: An alien enemy of any native nation with which a domestic nation or government is in conflict cannot become a partner in a partnership firm.

The inclusion of a minor in a partnership firm

  1. may be admitted to the benefits of partnership with the consent of all the other partners

  2. may be admitted to the benefits of partnership with no consent of other partners

  3. may be admitted to the benefits of partnership with the consent of his parents

  4. may be admitted to the benefits of partnership with the guarantee of his parents


Correct Option: A
Explanation:

Option (1) is correct: A person, who is a minor according to the law to which he is subject, may not be a partner in a firm, but with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.

A partner is

  1. not entitled to receive any remuneration

  2. entitled to receive remuneration with the consent of other partners

  3. entitled to receive remuneration by an order of the court

  4. entitled to receive remuneration


Correct Option: A
Explanation:

Option (1) is correct: Under Section 13 of the Partnership Act, a partner is not entitled to receive remuneration for taking part in the conduct of the business, but he has a share in the profits.

When a partner in a firm is adjudicated insolvent, he

  1. ceases to be a partner

  2. does not cease to be a partner

  3. ceases to be a partner with the consent of all the other partners

  4. ceases to be a partner by an order of the court


Correct Option: A
Explanation:

Option (1) is correct: When a partner in a firm is adjudicated insolvent, he ceases to be a partner.

When a partner agrees to share his profits derived from a firm with a third person, that third person is known as a

  1. sleeping partner

  2. nominal partner

  3. sub-partner

  4. Not a partner


Correct Option: C
Explanation:

Option (3) is correct.

The number of partners in a firm carrying a banking business should not exceed

  1. 20 persons

  2. 15 persons

  3. 10 persons

  4. 30 persons


Correct Option: C
Explanation:

Option (3) is correct: According to the Partnership Act, 1932, in a banking business, the number of partners should not exceed 10 persons.

A, B, and C enter into a partnership agreement under which C is not liable for the losses. D filed a suit against A, B, and C. Examine the position of C.

  1. C is liable to D only.

  2. C is liable to D jointly with A and B.

  3. C is not liable to D.

  4. C is not liable to D jointly with A and B.


Correct Option: B
Explanation:

Option (2) is correct: C is not liable for losses, but if any person sues the partnership firm, then all the partners will be liable jointly.

Which of the following is not a consequence of non-registration of a firm?

  1. No suit by an unregistered firm against a third party

  2. No suit by a partner against the firm for his rights

  3. A firm cannot set-off a claim

  4. Suit by a third party against the firm


Correct Option: D
Explanation:

Option (4) is correct: A third party can file a suit against an unregistered firm for a breach in contract. However, all the other consequences are applicable to an unregistered firm.

A partner is _______ for all the acts of a firm done while he is a partner.

  1. liable jointly with all the other partners

  2. liable severally

  3. not liable

  4. None of these


Correct Option: A
Explanation:

Option (1) is correct: Under Section 25 of the Partnership Act, all the partners are jointly liable for all the acts of a firm.

On dissolution, the partners remain liable till

  1. the accounts are settled

  2. the partners' dues are paid off

  3. a public notice is given

  4. the registrar strikes off the name


Correct Option: C
Explanation:

Option (3) is correct: On dissolution, the partners remain liable till a public notice is given.

A partner can retire

  1. at the age of superannuation

  2. at the low ebb of capital account

  3. in accordance with the partnership deed

  4. on his nominee becoming a partner


Correct Option: C
Explanation:

A partner can retire in accordance with the partnership deed.

A partner may retire with the consent of

  1. any partner

  2. some of the partners

  3. none of the partners

  4. all of the other partners


Correct Option: D
Explanation:

Option (4) is correct: Under Section 32 of the Act, a partner may retire with the consent of all of the other partners.

On attaining majority, a minor partner has to decide within ______ whether he shall continue in the firm or leave it.

  1. 6 months

  2. 12 months

  3. 3 months

  4. 1 month


Correct Option: A
Explanation:

Option (1) is correct: Under Section 30 of the Act, the time period given to a minor to decide whether he wants to continue as a partner or not is 6 months.

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