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

Which of these cannot be cause of dissolution of a firm?

  1. Ill health of partner

  2. Insanity

  3. Misconduct

  4. Transfer of interest
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to Section 44 of the Indian Partnership Act, Insanity of a partner and Misconduct by partner can be cause of dissolution of firm by court. If a partner has transferred his interest to third parties, other partners may apply to the firm to dissolve the firm. But ill health of a partner can not be the cause of dissolution of a firm because ill health is temporary. 

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 is given then :

  1. Minor will be demand to have become a full fledged partner

  2. Liability of partner continues in case of expulsion, retirement or dissolution of the firm

  3. Both

  4. None
Reveal answer Fill a bubble to check yourself
C 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. if no public notice is given then the partners continue to be liable to third parties in case of dissolution, retirement and expulsion. Minor partner within six months of attaining eighteen years of age choose to become or not to become partner and specify the same by way of public notice. If no public notice is given then minor deemed to have become a partner of the 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

A firm is not liable for the act of an insolvent partner ____________ .

  1. After the date of the order of adjudication

  2. All acts done before the order of his adjudication

  3. If due notice thereof is given

  4. If so ordered by the court
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  1. When a partner in a firm is adjudicated an insolvent he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is dissolved. 
    2. Where under a contract between the partners the firm is not dissolved by the adjudication of a partner as an insolvent, the estate of a partner so adjudicated is not liable for any act of the firm and the firm is not liable for any act of the insolvent, done after the date on which the order of adjudication is made. 
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 the following duties can be varied by an agreement between the partners?

  1. Duty to work without remuneration.

  2. Duty to contribute to losses.

  3. Duty to indemnify for losses caused due to willful negligence.

  4. All the three.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Partners can determine their mutual rights and duties by an agreement called partnership deed. Partnership Deed is an important part of partnership. It clearly states the duties of partners. Any change in duties such as duty to work without remuneration, duty to contribute to losses, duty to indemnify for losses caused due to willful negligence can be made by making changes in partnership deed.

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 the following enactments insist for a registered agreement of partnership? 

  1. the Indian Partnership Act, 1932

  2. the Indian Contract Act, 1872

  3. the Indian Registration Act, 1908

  4. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Registration of partnership firm is not compulsory but partners prefer to get it registered. Because if a partnership firm is not registered it can not file a suit against any third party. No partner can file a suit against any other partner. The firm can not file a suit against any partner. But third party can file a suit against 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

The court may not order dissolution of a firm on permanent incapacity of a ______________ .

  1. Dormant partner

  2. Active partner

  3. Managing partner

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

Dormant partner is a partner who takes no share in the active business of partnership but share profits or losses.  Permanent incapacity of a dormant partner does not have much effect on partnership because dormant partner does not manage its working. But permanent incapacity of active partner or managing partner may stop the working of business. So the court may not order for dissolution on permanent incapacity of a dormant partner. 

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

Guarantee given to a partner 'A' by the other partners 'B & C' means _________________.

  1. In case of loss 'A' will not contribute towards that loss.

  2. In case of insufficient profits 'A' will receive only the minimum guarantee amount.

  3. In case of loss or insufficient profits 'A' will receive the minimum guarantee amount.

  4. All of the above.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Guarantee given to a partner means partner will be given a fixed minimum amount of profit. and if any deficiency arise will be met by the other partner.  So in this A is given guarantee of minimum amount and if there is  loss or insufficient profit then B and C will pay the amount remaining short.

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 partner by holding out is personally liable to _______________ .

  1. all outsiders

  2. all existing suppliers

  3. who has given credit to the firm on his representation

  4. to all who have given credit to the firm
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A partner by holding out means a person who is not a member of firm but allows himself/herself to be represented as a partner. Such person is responsible to person who has given loan to firm on his representation because loan has been given by assuming that he/she is member.

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

When it is not registered, a partnership firm is _____________________.

  1. deemed to be an illegal association and is disallowed 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 carry on business only with the special permission of the Registrar of Firms
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Registration of partnership is not compulsory under law. But if a partnership firm is not registered, it can not file a suit against the third party. No partner can file a suit against any other partner. The firm can not file a suit against any partner. But third party can file a suit against the 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

Features of a partnership firm are _____________________.

  1. Two or more persons are carrying common business under an agreement.

  2. They are sharing profits and losses in the fixed ratio.

  3. Business is carried by all or any of them acting for all as an agent

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All these are features of partnership. To form a partnership minimum two persons are required. A single person can not form partnership. Partnership is made to share profits and losses in the ratio mentioned in partnership deed. In partnership business is carried by all or any one of them can work for all.