Partnership and Business Law

Option (1) is incorrect: Explanation 1 under Section 6 of the Partnership Act states that the sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not on its own make such persons partners. Option (2) is incorrect: Explanation 2 under Section 6 of the Partnership Act states the receipt by a person of a share of the profits of a business does not on its own make him a partner with the persons carrying on the business. Option (3) is correct: Under Section 6 of the Partnership Act, in determining whether a group of persons is or is not a firm or whether a person is or is not a partner in a firm, regard shall be given to the real relation between the parties. Option (4) is incorrect: No such agreement to share profits of business makes him a partner in the firm.

Option (1) is correct: U/s 31 of the Act, subject to contract between the partners, no person shall be introduced as a partner into a firm without the consent of all the existing partners.

Option (4) is correct: Under Section 44 of the Partnership Act, either partner or court itself can ask for dissolution of firm in the following cases: Insanity of partner, incapacity of partner, misconduct of partner, continuous losses, and constant breach of agreement by partner.

Option (1) is correct: Section 7 of the Partnership Act states that where no provision is made by contract between the partners for the duration of their partnership or for the determination of their partnership, the partnership is partnership at will. Option (2) is incorrect: Duration is not fixed in the case of partnership at will. Option (3) is incorrect: It is a case of particular partnership.

Option (1) is incorrect: Partner is an agent of firm. Option (2) is correct: U/s 18 of the Act, a partner is an agent of firm for the purpose of business of the firm. Option (3) is incorrect: Partner is not the representative of firm. Option (4) is incorrect: Cannot be called co-partner of firm.

Option (1) is incorrect: It is not a dissolution by agreement. Option (2) is correct: U/s 40 of Partnership Act, a firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners. Option (3) is incorrect: It is not a dissolution by agreement.

Option (3) is correct: U/s 30 (5) of the Act, it is essential to give a public notice within 6 months whether the minor partner wants to continue as a partner or not.

Option (4) is correct: All of the above terms are true regarding expulsion of a partner.

Option (1) is incorrect: A minor cannot be a partner of a firm. Option (2) is incorrect: A minor cannot be a representative of a firm. Option (3) is incorrect: A minor is not entitled to carry on the business of a firm. Option (4) is correct: U/s 30 of the Act, a minor can be admitted to the benefits of a partnership with the consent of all the partners for the time being, but not in the losses.

Option (1) is incorrect: Only companies can be registered with registrar of companies. Option (2) is incorrect: No such authority exists. Option (3) is correct: A partnership firm is a firm which has to be registered with registrar of firms. Option (4) is incorrect: District court has no such authority.

Option (1) is incorrect: Partnership arises from contract and not from status. Option (2) is correct: U/s 5 of Partnership Act, the relation of partnership arises from contract and not from status. Option (3) is incorrect: HUF or a company arises from operation of law.

Option (1) is incorrect: Partnership firm is not a legal firm in the eyes of law, so there cannot be a partnership between two partnership firms. Option (2) is incorrect: There cannot be a partnership with a partnership firm. Option (3) is correct: Partnership between individual members of one firm and the individual members of another firm is a valid partnership. Option (4) is incorrect: Option (3) is correct.

Option (1) is incorrect: The suit is not maintainable with the leave of the court. Option (2) is incorrect: The suit is maintainable with the concurrence of X. Option (3) is correct: The suit is liable to be rejected under Section 69 of the Partnership Act because under Section 69 of the Act, an unregistered partnership cannot bring a suit against any person. Option (4) is incorrect: The suit will not become maintainable.

Option (1) is incorrect: A partnership firm is not a distinct entity from its partners. Option (2) is incorrect: A partnership firm is not an independent juristic person. Option (3) is correct: A partnership firm is an agent of its partners.

Option (3) is correct: An allegation of fraud by a third party does not amount to misconduct by a partner.