Tag: dissolution of partnership

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Questions Related to dissolution of partnership

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

Date of compulsory dissolution for Partnership firm is the ________.

  1. date of order of court

  2. date of applying for court

  3. date when firm closes its business

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

Compulsory dissolution occurs by court order, and the date of the order is the effective date of dissolution.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

When firm is compulsory dissolved?

  1. All the partners are insolvent.

  2. Firms business become unlawful.

  3. All but not one become insolvent.

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

Compulsory dissolution occurs when the business becomes unlawful or when all partners (or all but one) become insolvent.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

After dissolution, the authority to bind the Firm, other mutual rights and liabilities of Partners continue, in so far as may be necessary _____________.

  1. to wind up the affairs of the Firm

  2. to complete the transaction that had begun but left unfinished at the time of dissolution

  3. either (a) or (b)

  4. both (a) and (b).
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

After dissolution, partners retain the authority to wind up affairs and complete unfinished transactions to settle the firm's obligations.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

The Mode of Dissolution of Firm, under Indian Partnership Act, 1932 is______.

  1. illustrative

  2. inclusive

  3. exhaustive

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

The modes of dissolution listed in the Indian Partnership Act are considered 'inclusive' as they cover the primary scenarios but do not necessarily exclude all other legal possibilities.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

The compulsory dissolution of a firm will arise in case of __________.

  1. on the death of majority of partners

  2. on the insolvency of all partners

  3. in case of continuous losses

  4. in case of dead lock of management
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compulsory dissolution is mandatory when all partners become insolvent, as the firm can no longer function legally or financially.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

On the dissolution of a Firm, every Partner or his representative is entitled to have the __________ applied in payment of the debts and liabilities of the Firm.

  1. business of the firm

  2. goodwill of the firm

  3. property of the firm

  4. assets of the firm.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Upon dissolution, the property of the firm must be applied to pay off debts and liabilities before any remaining assets are distributed among partners.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

On which of the following grounds all or any one of the Partner can apply to the court for Dissolution?

  1. Perpetual Losses

  2. Unsound mind of a Partner

  3. Misconduct

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

Under the Indian Partnership Act, the court may dissolve a firm on various grounds including a partner's unsound mind, misconduct, or persistent losses. Since all these are valid grounds, 'All of these' is the correct choice.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

For Dissolution of a Firm, Partners may apply to the Court on the ground of_______.

  1. insanity of partner

  2. misconduct of partner

  3. perpetual losses in business

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

The court has the authority to dissolve a firm if a partner becomes of unsound mind, commits misconduct, or if the firm suffers perpetual losses. All these are recognized legal grounds for dissolution.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

Upon dissolution of Firm, the Surplus left after settlement of the debts and liabilities of the Firm shall be ______________.

  1. credited to the Reserve Account

  2. credited to the Government of India A/c

  3. distributed among the Partners equally

  4. distributed among the Partners according to their rights.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the Indian Partnership Act, after settling all debts and liabilities, any remaining surplus must be distributed among the partners in accordance with their rights as defined in the partnership agreement.