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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 business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the absence of a partnership deed, the Indian Partnership Act specifies that partners are entitled to interest on loans provided to the firm at a rate of 6% per annum. They are not entitled to salary or interest on capital.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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

Section 69 of the Indian Partnership Act prevents an unregistered firm from filing a suit against third parties to enforce rights arising from a contract.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The application for registration of a firm must be signed by all the partners or their authorized agents.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Rectification of mistakes in the Register of Firms requires the consent and signature of all partners or their agents, as it affects the official record of the firm.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An unregistered firm is barred from filing suits against third parties, including incoming partners, outgoing partners, or minors admitted to the benefits of the firm, to enforce contractual rights.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The primary disability of an unregistered firm is the inability to file a suit against a third party to enforce contractual rights.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Non-registration does not affect certain rights, such as a third party's right to sue the firm, the official receiver's right to recover property, or a partner's right to sue for dissolution. Therefore, all these are unaffected.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Admission of a new partner does not require a public notice under the Indian Partnership Act, as it does not inherently change the firm's legal status or the liability of existing partners toward third parties in the same way as retirement, expulsion, or dissolution.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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

An unregistered partnership firm is not illegal; it is permitted to carry on business. However, it faces specific legal disabilities, such as the inability to file a suit against third parties to enforce contractual rights.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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

  1. Not a conclusive

  2. Prima facie

  3. Acceptable

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

Sharing of profits is considered prima facie evidence of a partnership, meaning it is sufficient to establish the existence of a partnership unless proven otherwise by other facts.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Pledging goods of the firm as security is generally considered within the implied authority of a partner in the ordinary course of business, whereas arbitration and opening bank accounts in personal names are typically excluded.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Borrowing money on behalf of the firm is a standard act within the implied authority of a partner to conduct the firm's business, unlike acquiring or transferring immovable property, which usually requires express authority.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

While partners generally share both profits and losses, the law allows for specific agreements where a partner may be entitled to a share of profits without being liable for losses.

Multiple choice business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

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
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The application for registration requires the firm name, place of business, and names of partners, but it does not require the disclosure of individual capital contributions.