Tag: dissolution of firm

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Questions Related to dissolution of firm

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Application for dissolution of a firm on the ground of misconduct of a partner can be made by :

  1. Any partner

  2. Any partner other than who is guilty of misconduct

  3. Police officer

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

Partnership completely depends on trust and good faith. A partner acts as both agent and principal. If a partner misconduct then it can affect the image of firm. On the basis of this, any partner other than who is guilty of misconduct can file a suit for dissolution.  

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

XY Associates a partnership firm is having two partners X and Y. In a fatal road accident X lost his life. The firm now stands __________.

  1. Dissolved

  2. In temporary suspension of business

  3. Liquidated

  4. Not affected at all
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Partnership is an agreement between two or more than two persons. Minimum two persons are required for partnership. In this after the death of X, only Y left. No single person can continue the partnership. So the firm stands dissolved.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

State which statement(s) is/ are true :

  1. Dissolution of firm necessarily involves dissolution of partnership.

  2. Dissolution of partnership necessarily involve dissolution of the firm.

  3. Both

  4. None
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Dissolution of partnership is different from dissolution of firm. Dissolution of partnership does not necessarily involves dissolution of firm. But if there is dissolution of firm then it will lead to dissolution of partnership, because in dissolution of firm all assets are sold, liabilities are paid and business ceases to exist. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

In order to file a suit against a client for non-payment of dues an unregistered firm is required to first :

  1. File or FIR with the local police

  2. Get registered before filling the suit

  3. File a suit before a lower court

  4. Write off the amount as the some cannot be recovered in any case
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Registration of partnership is not compulsory under law. But if partnership firm is not registered, it can not enforce its claims against a third party in the court of law. So, to file a suit against a client registration is compulsory. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

A partnership firm is dissolved except by ___________.

  1. Expiry of term

  2. Due to marriage of any partner

  3. Due to death of any partner

  4. Due to insolvency of any partner
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A partnership firm is dissolved when all partners become insolvent or all except one become insolvent. In the case of death of partner also , court may order to dissolve the firm. A partnership firm gets automatically dissolved after expiry of fixed period of time for which partnership firm is formed. But partnership firm can not be dissolved due to marriage of any partner, because marriage does not affect the working of firm. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Application for dissolution of a firm on the ground of permanent incapacity of a partner can be made by ________.

  1. Any partner

  2. Any partner other than who is of permanent incapacity

  3. Police officer

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

If a partner has become permanently incapable of performing his duties as a partner then another partner can sue for dissolution of firm. Incapable of performing his duties can be due to any reason like going abroad for long time or imprisonment of partner for a long time. As a partner would not be able to perform his duties, the court may order for dissolution. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Which of these statement is not correct one?

  1. A Joint Hindu Family is not

  2. As per Income-tax Act, Joint Hindu Family is distinct from its member and is assessed separately

  3. Joint Hindu family business arise by operation of law and not by contract

  4. A joint Hindu Family is dissloved on death of a coparcener
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A joint Hindu Family is a type of organisation in which all the members of a Hindu Undivided Family manage and control the business under the direction of head of the family. In this all the members become coparcener. It comes into existence by operation of Hindu law.  The existence of Joint Hindu Family is not affected by the death of a coparcener because remaining coparcener can continue the business. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Court may order dissolution of a firm on any other grounds which  _______ just and equitabe .

  1. it considers

  2. are prescribed in the act as

  3. the partners considers

  4. the registrar of firms considers
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Dissolution can be done by suing the other partners and bringing the case to the court. According to Section 44 , if court finds it just and equitable then court may order for dissolution. Reason could be insolvency of a partner, Death of partner, when a partner becomes of unsound mind etc. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

If no public notice of dissolution of a firm is given :

  1. All the partners continue to remain liable to third party

  2. The firm is adjudged defaulter

  3. The firm stand dissolved

  4. Still the firm is not liable to third party
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 72 lays down the manner and the cases in which the public notice of certain matter relating to partnership firm is to be given. According to this section, If on dissolution of a registered firm a public notice is not given, the partners shall continue to be liable to third parties for any act done by any of them which would have been an act of the firm done before dissolution.  

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

In which of these cases a partner give notice for dissolution of partnership? 

  1. If he has tacit support of at least 2/3rd support of other partners

  2. In case of particular partnership

  3. In case of Partnership at will

  4. Not permitted under any circumstances
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In case  of partnership at will a partner can dissolve it by giving notice of dissolution to other partners. The notice should be communicated to other partners as mentioned in agreement and if not mentioned then mode of communication should be reasonable. The notice should be clear and should not be confusing.