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Partnership and Business Law

1,019 Questions

Test your knowledge of partnership regulations and business law with these practice questions. The topics include the rights of minor partners, firm dissolution, retirement rules, and public notices. This material is crucial for law exams and legal studies.

Rights of minor partnersPublic notice requirementsFirm dissolution rulesPartner retirementHolding out partner principlePartnership deed provisions

Partnership and Business Law Questions

Multiple choice

The liability of partners is

  1. individual

  2. joint and several

  3. optional

  4. limited
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

All the partners are jointly and severally liable for the acts of firm. The liability of partners is unlimited.

Multiple choice

The act done by a partner under his authority and in the good faith

  1. is binding upon the firm

  2. is binding upon the partner himself

  3. is optional for the firm to assume

  4. does not bind anyone
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Because of mutual agency relations, the partners can bind the firm provided the act is done in good faith and within authority. The acts done outside the scope of authority are not binding upon the firm.

Multiple choice

In absence of any contract, a partner

  1. may be expelled by majority of partners

  2. may be expelled by consent of all other partners

  3. may not be expelled by partners

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If there is no such contract between partners, a partner can't be expelled by any number of partners.

Multiple choice

The rights and liabilities of an expelled partner

  1. do not arise at all

  2. are as that of active partners

  3. are as that of a retiring partner

  4. are decided by the court
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The expelled partner has all the rights just as that of retiring partner.

Multiple choice

Garner V. Murray case is applicable in case of

  1. insolvency of partners

  2. solvency of partners

  3. dissolution by will

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Garner V. Murray case is applicable in case of insolvency of partners. As per ruling of this case, the solvent partners must make up the deficiency of insolvent partners in the ratio of their capital which stands to the credit of their account just before dissolution.

Multiple choice

A, B and C were partners in a firm, in which only A has made contribution as capital. A dies and his wife claimed to be partner in his place. B has objection against it. In this case,

  1. his wife can become the partner

  2. the firm will have to dissolve

  3. A and Mrs. B can become partners

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A new partner cannot come without the consent of all existing partners. The firm is to dissolve on ground of death of a partner.

Multiple choice

The liability of each partner of a firm is

  1. unlimited

  2. limited

  3. reasonable

  4. as decided by the court
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The liability of partners is unlimited. The members of a joint stock company enjoy limited liability.

Multiple choice

Who among the following partners cannot bind the firm by his acts?

  1. Active partner

  2. Minor partner

  3. Sub-partner

  4. Nominal partner
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sub-partner can not bind the firm by his acts. Active partner actively participates in the business. Nominal partner only lends his name to firm. Minor can be admitted to partnership with the consent of partners. All these can bind the firm by their acts.

Multiple choice

Which of the following is not a liability of a minor partner?

  1. No personal liability for the acts of firm.

  2. It is limited to the extent to his share in property of firm.

  3. He is not liable even in insolvency of firm.

  4. He has unlimited liability.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The minor cannot become insolvent and his liability cannot be made unlimited.

Multiple choice

Which of the following is not a right of a minor partner?

  1. To inspect the books

  2. To share the profits

  3. To file a suit against other partners while as a member of the firm

  4. To continue or not to continue as partner
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The minor can not file a suit for account against other partners while as a member of the firm. All the others are the rights of a minor partner.