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Indian Partnership Act 1932

Description: Questions on Indian Partnership Act 1932
Number of Questions: 15
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Tags: Partnership The India Partnership Act, 1932
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A partner of an unregistered firm can sue for ____ of the firm.

  1. goodwill

  2. share in property

  3. dissolution

  4. nothing


Correct Option: D
Explanation:

The non-registration does not affect the following rights of a firm: (a) Suit for Dissolution (b) Right of an official receiver or official assignee (c) Right to Claim a set-off where the subject-matter of the suit does not exceed Rs. 100 in value.

The conclusive evidence of registration of firm is

  1. the register of firms maintained by the registrar of the firm

  2. the certificate of registration of the firm

  3. a certified copy of the register of firms

  4. examination of submitted particulars


Correct Option: A
Explanation:

After providing certificate, the registrar shall record an entry in the register of firms. So, it is the conclusive evidence of registration of firm.

Expulsion of a partner from the firm is regular when partnership deed authorises the other partners, and this authority is used by

  1. any majority of the partners

  2. two-third majority of the partners

  3. three-fourth majority of the partners

  4. unanimous consent of all the existing partners


Correct Option: A
Explanation:

Any majority of the partners is authorised for expulsion of a partner from the firm.

In which of the following cases, is the firm not bound by the act of the partner?

  1. When act is done by a partner or his agent on behalf of the firm.

  2. When act is done by a partner in the name of the firm.

  3. When act is done by a partner in any manner expressing or implying an intention to bind the firm.

  4. When act is done fraudulently or negligently.


Correct Option: D
Explanation:

Firm is not bound by the acts done fraudulently or negligently as a partner is doing fraud on his own behalf.

Ram, Sham and Mohan are in partnership. Ram and Mohan are declared insolvent while Sham wants to continue the firm. Which of the following is true?

  1. Firm is also declared insolvent.

  2. Sham has to repay the debts of the firm.

  3. Firm is automatically dissolved, and hence Sham cannot continue.

  4. The court has to give order for dissolution.


Correct Option: C
Explanation:

When all the partners of a firm are declared insolvent, or all but one partner is insolvent, the firm is compulsarily dissolved.

In which of the following cases, is dissolution of partnership through court not possible?

  1. Insanity of a partner

  2. Misconduct by the partner

  3. Insolvency of partner

  4. Incapacity of partner


Correct Option: C
Explanation:

When all the partners, or one of the partners is declared insolvent, the firm is automatically dissolved. There is no need to move the court in that case.

Which of the following acts is not included in the implied authority of a partner?

  1. To buy or sell goods on account of partnership

  2. To borrow money for the purposes of firm

  3. To enter into partnership on behalf of firm

  4. To engage a lawyer to defend actions against firm


Correct Option: C
Explanation:

A partner cannot enter into partnership on behalf of the firm.

A partner of an unregistered firm cannot sue the firm or any other partner of the firm to enforce a right under provisions

  1. arising from a contract

  2. of Indian Companies Act

  3. of mutual agreement

  4. of Indian Registration Act


Correct Option: A
Explanation:

A partner of an unregistered firm cannot sue the firm or any other partner of the firm to enforce a right under provisions arising from a contract.

Sourav and Gourav agree to divide the profit of a business in equal shares. But if there is any loss in the business, it will be borne by Sourav alone. The partnership agreement is

  1. void

  2. lawful

  3. voidable

  4. illegal


Correct Option: B
Explanation:

The partnership agreement will be lawful as partners have mutually agreed regarding profit or loss sharing ratio.

Rights and obligations of partners are determined under which section of the Partnership Act, 1932?

  1. Section 10

  2. Section 11

  3. Section 17

  4. Section 19


Correct Option: B
Explanation:

Section 11 of Partnership Act states that every partner has some rights alongwith obligations.

Which of the following is true?

  1. Partnership agreements are always implied.

  2. Partnership agreements are always expressed.

  3. Partnership agreements are implied and expressed.

  4. Partnership agreements are implied or expressed.


Correct Option: D
Explanation:

Partnership agreement may not be implied and expressed simultaneously. So, it may be implied or expressed.

Viru, Yuvi and Rohit were partners in a firm. During the course of business, the firm ordered a Lathe Machine with Amrit Mechanicals Ltd. After the order was placed, but before machinery was delivered, Rohit expired. Thereafter, the remaining partners became insolvent, and the firm was unable to pay for the machine. Which of the following is true?

  1. Rohit's estate will be liable for the price of the machine.

  2. Rohit's estate will not be liable for the price of the machine.

  3. Amrit Mechanicals Ltd. will be liable for the price of the machine.

  4. Yuvi’s estate will be liable for the price of the machine.


Correct Option: B
Explanation:

Rohit's estate will not be liable for the price of the machine as order was not placed on personal behalf of Rohit.

The relation of partners arises from

  1. status

  2. an agreement

  3. legal provisions

  4. mutual understanding


Correct Option: B
Explanation:

The relation of partnership arises from mutual agreement between all the partners.

Which of the following partners is liable in relation to the firm?

  1. Partner by holding out

  2. Secret partner

  3. Sub-partner

  4. Partner by estoppel


Correct Option: C
Explanation:

A partner may associate anybody else in his share in the firm. If he gives a part of his share to the stranger, then the sub-partner is a non-entity for the partnership.

The partnership deed must be properly drafted and stamped according to the provision of

  1. Indian Partnership Act

  2. Indian Stamp Act

  3. Indian Contract Act

  4. Indian Companies Act


Correct Option: B
Explanation:

Partnership deed must be properly drafted and stamped according to the provision of Indian Stamp Act.

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