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All questions of Unit 1: General Nature of Partnership for CA Foundation Exam
A partnership can be formed with: - a)Two minors
- b)A minor and an artificial person
- c)A minor and a major
- d)Two persons over 20 years of age
Correct answer is option 'C'. Can you explain this answer?
A partnership can be formed with:
a)
Two minors
b)
A minor and an artificial person
c)
A minor and a major
d)
Two persons over 20 years of age
|
Freedom Institute answered |
Answer:
A partnership can be formed with the following combinations:
- Two minors: A partnership can be formed between two individuals who are under 18 years of age, but this is not a legally recognized partnership. Minors generally lack the legal capacity to enter into binding contracts.
- A minor and an artificial person: An artificial person refers to a legal entity created by law, such as a corporation or a limited liability company. In some jurisdictions, a partnership can be formed between a minor and an artificial person, but this may vary depending on local laws.
- A minor and a major: A partnership can be formed between an individual who is under 18 years old (minor) and an individual who is 18 years old or older (major). However, the minor's rights and liabilities may be limited in such a partnership.
- Two persons over 20 years of age: A partnership can be formed between two individuals who are 20 years old or older. This is the most common and widely recognized form of partnership.
In the given options, option D (Two persons over 20 years of age) is the correct answer.
A partnership can be formed with the following combinations:
- Two minors: A partnership can be formed between two individuals who are under 18 years of age, but this is not a legally recognized partnership. Minors generally lack the legal capacity to enter into binding contracts.
- A minor and an artificial person: An artificial person refers to a legal entity created by law, such as a corporation or a limited liability company. In some jurisdictions, a partnership can be formed between a minor and an artificial person, but this may vary depending on local laws.
- A minor and a major: A partnership can be formed between an individual who is under 18 years old (minor) and an individual who is 18 years old or older (major). However, the minor's rights and liabilities may be limited in such a partnership.
- Two persons over 20 years of age: A partnership can be formed between two individuals who are 20 years old or older. This is the most common and widely recognized form of partnership.
In the given options, option D (Two persons over 20 years of age) is the correct answer.
Can you explain the answer of this question below: A public company can have a maximum of _________member.
- A:
Unlimited
- B:
50
- C:
20
- D:
10
The answer is a.
A public company can have a maximum of _________member.
Unlimited
50
20
10
|
Arun Khanna answered |
There is no upper limit in case of a public limited company.
No Maximum number as such, can be unlimited.
In case of Partnership, in the event of losses, unless agreed otherwise, the loss is to be borne by all the partners_________.- a)Equally
- b)In profit sharing ratio
- c)In capital ratios
- d)By draw of lots
Correct answer is option 'B'. Can you explain this answer?
In case of Partnership, in the event of losses, unless agreed otherwise, the loss is to be borne by all the partners_________.
a)
Equally
b)
In profit sharing ratio
c)
In capital ratios
d)
By draw of lots
|
Priya Patel answered |
Sharing profits of the business: First, there must exist a business i.e. trade, occupation and profession. The motive of the business is the acquisition of gains. Therefore there can be no partnership where there is no intention to carry on
the business and to share the profit thereof. Secondly, there must be an agreement to share profits. The agreement to share losses is not an essential element. However in the event of losses, unless agreed otherwise, these must be born in the profit sharing ratio.
The maximum number of partners is mentioned in- a)The Partnership Act
- b)The General Clauses Act
- c)The Companies Act
- d)The Societies Registration Act
Correct answer is option 'C'. Can you explain this answer?
The maximum number of partners is mentioned in
a)
The Partnership Act
b)
The General Clauses Act
c)
The Companies Act
d)
The Societies Registration Act
|
Vandana Kulkarni answered |
The maximum number of partners in a company is mentioned in the Companies Act. Let's discuss this in more detail below.
Companies Act and Maximum Number of Partners
The Companies Act, 2013, governs the formation, management, and winding up of companies in India. It specifies the rules and regulations that companies must follow, including the maximum number of partners they can have.
According to Section 2(68) of the Companies Act, a company can be formed by two or more persons, and the maximum number of partners in any such company cannot exceed 200. This means that a company can have a minimum of two partners and a maximum of 200 partners.
However, there are some exceptions to this rule. In the case of a private company, the maximum number of partners is restricted to 200, but the minimum number of partners is only two. A single person cannot form a private company.
In the case of a public company, there is no restriction on the maximum number of partners. However, the minimum number of partners is seven.
Conclusion
Thus, it can be concluded that the maximum number of partners allowed in a company is specified in the Companies Act, 2013. The act governs the formation, management, and winding up of companies in India and sets out rules and regulations that companies must follow. The maximum number of partners in any company cannot exceed 200, except in the case of a public company where there is no restriction on the maximum number of partners.
Companies Act and Maximum Number of Partners
The Companies Act, 2013, governs the formation, management, and winding up of companies in India. It specifies the rules and regulations that companies must follow, including the maximum number of partners they can have.
According to Section 2(68) of the Companies Act, a company can be formed by two or more persons, and the maximum number of partners in any such company cannot exceed 200. This means that a company can have a minimum of two partners and a maximum of 200 partners.
However, there are some exceptions to this rule. In the case of a private company, the maximum number of partners is restricted to 200, but the minimum number of partners is only two. A single person cannot form a private company.
In the case of a public company, there is no restriction on the maximum number of partners. However, the minimum number of partners is seven.
Conclusion
Thus, it can be concluded that the maximum number of partners allowed in a company is specified in the Companies Act, 2013. The act governs the formation, management, and winding up of companies in India and sets out rules and regulations that companies must follow. The maximum number of partners in any company cannot exceed 200, except in the case of a public company where there is no restriction on the maximum number of partners.
Sharing of profit is ________ evidence of existence of partnership.- a)Conclusive
- b)Not a conclusive
- c)Confirmative
- d)Collaborative
Correct answer is option 'C'. Can you explain this answer?
Sharing of profit is ________ evidence of existence of partnership.
a)
Conclusive
b)
Not a conclusive
c)
Confirmative
d)
Collaborative
|
Parth Lele answered |
As per I learnt Sharing of Profits is just a Prima Facie Evidence So the answer should be b)Not a conclusive because as per law language the answer b) is more appropriate
Which of these statements is not true with respect to a Joint Hindu Family Business?
- a)Coparcener is liable only to the extent of his share in the family property
- b)A Joint Hindu Family firm arises on the basis of status i.e. Birth or by operation of law
- c)Death of a coparcener does not dissolve the Joint Hindu Family firm
- d)It can have female members
Correct answer is option 'A'. Can you explain this answer?
Which of these statements is not true with respect to a Joint Hindu Family Business?
a)
Coparcener is liable only to the extent of his share in the family property
b)
A Joint Hindu Family firm arises on the basis of status i.e. Birth or by operation of law
c)
Death of a coparcener does not dissolve the Joint Hindu Family firm
d)
It can have female members
|
Nandini Iyer answered |
To determine which statement is not true with respect to a Joint Hindu Family Business, let's analyze each statement:
-
It can have female members:
- This is true. As per the Hindu Succession (Amendment) Act, 2005, daughters are recognized as coparceners and have the same rights as sons in the Joint Hindu Family property.
-
A Joint Hindu Family firm arises on the basis of status i.e. Birth or by operation of law:
- This is true. A Joint Hindu Family business is created by the birth of a male member into the family and not by an agreement between parties.
-
Death of a coparcener does not dissolve the Joint Hindu Family firm:
- This is true. The death of a coparcener does not dissolve the Joint Hindu Family business; it continues with the remaining members.
-
Coparcener is liable only to the extent of his share in the family property:
- This is not true. In a Joint Hindu Family Business, the liability of the coparceners is typically unlimited. This means that the personal property of the coparceners can also be used to settle the debts of the family business.
Therefore, the statement that is not true with respect to a Joint Hindu Family Business is:
- Coparcener is liable only to the extent of his share in the family property.
Registration of a firm is____________- a)Compulsory
- b)Optional
- c)Occasional
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
Registration of a firm is____________
a)
Compulsory
b)
Optional
c)
Occasional
d)
None of the above
|
|
Ankita Mukherjee answered |
Introduction:
Registering a firm is an important step for any business entity. It not only provides legal recognition to the business but also helps in availing various benefits and protections offered under the law.
Explanation:
The given statement is "Registration of a firm is optional". Let us understand why registration of a firm is optional.
- No legal requirement: There is no legal requirement for a firm to register itself. However, if the firm wishes to avail certain benefits and protections offered under the law, it may choose to register itself.
- Advantages of registration: Registration of a firm provides certain advantages such as legal recognition, separate legal entity status, limited liability protection, access to credit facilities, etc.
- Types of registration: A firm can be registered under various laws such as the Companies Act, 2013, Partnership Act, 1932, Limited Liability Partnership Act, 2008, etc. The type of registration depends on the nature of the business entity and the number of members involved.
- Compliance requirements: Once a firm is registered, it is required to comply with various legal and regulatory requirements such as filing of annual returns, maintenance of books of accounts, payment of taxes, etc.
Conclusion:
In conclusion, registration of a firm is not compulsory but it is advisable to do so in order to avail the benefits and protections offered under the law. It is important to comply with the legal and regulatory requirements once a firm is registered.
Registering a firm is an important step for any business entity. It not only provides legal recognition to the business but also helps in availing various benefits and protections offered under the law.
Explanation:
The given statement is "Registration of a firm is optional". Let us understand why registration of a firm is optional.
- No legal requirement: There is no legal requirement for a firm to register itself. However, if the firm wishes to avail certain benefits and protections offered under the law, it may choose to register itself.
- Advantages of registration: Registration of a firm provides certain advantages such as legal recognition, separate legal entity status, limited liability protection, access to credit facilities, etc.
- Types of registration: A firm can be registered under various laws such as the Companies Act, 2013, Partnership Act, 1932, Limited Liability Partnership Act, 2008, etc. The type of registration depends on the nature of the business entity and the number of members involved.
- Compliance requirements: Once a firm is registered, it is required to comply with various legal and regulatory requirements such as filing of annual returns, maintenance of books of accounts, payment of taxes, etc.
Conclusion:
In conclusion, registration of a firm is not compulsory but it is advisable to do so in order to avail the benefits and protections offered under the law. It is important to comply with the legal and regulatory requirements once a firm is registered.
An unregistered firm cannot claim____________- a)Set on
- b)Set off
- c)Set on and set off
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
An unregistered firm cannot claim____________
a)
Set on
b)
Set off
c)
Set on and set off
d)
None of the above
|
|
Sinjini Gupta answered |
Unregistered firms cannot claim set-off in GST returns. This means that they cannot adjust the GST paid on purchases against the GST collected on sales. Let's look at this in more detail below.
What is Set-off in GST?
Set-off in GST refers to the adjustment of the GST paid on purchases against the GST collected on sales. This helps in reducing the final GST liability of the taxpayer.
What is an Unregistered Firm?
An unregistered firm is a business that is not registered under the GST regime. As per the GST Act, businesses with an annual turnover of less than Rs.20 lakhs (Rs.10 lakhs for special category states) are not required to register for GST. However, unregistered firms cannot avail the benefits of input tax credit or claim set-off.
Why can't Unregistered Firms claim Set-off in GST?
Unregistered firms cannot claim set-off in GST because they are not registered under the GST regime. To claim set-off, a business should be registered under GST and file GST returns. Since unregistered firms are not registered, they cannot file GST returns and hence cannot claim set-off.
Conclusion
Unregistered firms cannot claim set-off in GST returns. This means that they cannot adjust the GST paid on purchases against the GST collected on sales. To claim set-off, a business should be registered under GST and file GST returns.
What is Set-off in GST?
Set-off in GST refers to the adjustment of the GST paid on purchases against the GST collected on sales. This helps in reducing the final GST liability of the taxpayer.
What is an Unregistered Firm?
An unregistered firm is a business that is not registered under the GST regime. As per the GST Act, businesses with an annual turnover of less than Rs.20 lakhs (Rs.10 lakhs for special category states) are not required to register for GST. However, unregistered firms cannot avail the benefits of input tax credit or claim set-off.
Why can't Unregistered Firms claim Set-off in GST?
Unregistered firms cannot claim set-off in GST because they are not registered under the GST regime. To claim set-off, a business should be registered under GST and file GST returns. Since unregistered firms are not registered, they cannot file GST returns and hence cannot claim set-off.
Conclusion
Unregistered firms cannot claim set-off in GST returns. This means that they cannot adjust the GST paid on purchases against the GST collected on sales. To claim set-off, a business should be registered under GST and file GST returns.
The most important element in partnership is:- a)Business
- b)Sharing of Profits
- c)Agreement
- d)Business to be carried on by all or any of them acting for all.
Correct answer is option 'D'. Can you explain this answer?
The most important element in partnership is:
a)
Business
b)
Sharing of Profits
c)
Agreement
d)
Business to be carried on by all or any of them acting for all.
|
Jatin Mehta answered |
Partnership is an agreement between two or more persons to carry on a business and share profits. The most important element in partnership is that the business is to be carried on by all or any of them acting for all. This means that all partners have equal rights and responsibilities in the business, and they can act on behalf of the partnership without the need for individual consent.
Importance of 'Business to be carried on by all or any of them acting for all'
1. Equal participation: The element of carrying on the business by all or any of them acting for all ensures that each partner has an equal say in the decision-making process. This helps to avoid conflicts and promotes a sense of mutual trust and respect among partners.
2. Shared responsibility: All partners are equally responsible for the success or failure of the business, and they share the risks and rewards of the partnership. This encourages a collaborative approach to problem-solving and promotes a sense of accountability among partners.
3. Flexibility: By allowing any partner to act on behalf of the partnership, the element of carrying on business by all or any of them acting for all provides flexibility in the day-to-day operations of the business. This allows partners to take quick decisions and respond to changing market conditions.
4. Continuity: The partnership can continue even if one partner decides to leave or dies, as the business is carried on by all or any of them acting for all. This ensures continuity in the operations of the business and helps to maintain the goodwill and reputation of the partnership.
Conclusion
In conclusion, the element of carrying on business by all or any of them acting for all is the most important element in partnership. It promotes equal participation, shared responsibility, flexibility, and continuity in the operations of the business. Therefore, it is essential for partners to clearly define this element in their partnership agreement to ensure a smooth and successful partnership.
Importance of 'Business to be carried on by all or any of them acting for all'
1. Equal participation: The element of carrying on the business by all or any of them acting for all ensures that each partner has an equal say in the decision-making process. This helps to avoid conflicts and promotes a sense of mutual trust and respect among partners.
2. Shared responsibility: All partners are equally responsible for the success or failure of the business, and they share the risks and rewards of the partnership. This encourages a collaborative approach to problem-solving and promotes a sense of accountability among partners.
3. Flexibility: By allowing any partner to act on behalf of the partnership, the element of carrying on business by all or any of them acting for all provides flexibility in the day-to-day operations of the business. This allows partners to take quick decisions and respond to changing market conditions.
4. Continuity: The partnership can continue even if one partner decides to leave or dies, as the business is carried on by all or any of them acting for all. This ensures continuity in the operations of the business and helps to maintain the goodwill and reputation of the partnership.
Conclusion
In conclusion, the element of carrying on business by all or any of them acting for all is the most important element in partnership. It promotes equal participation, shared responsibility, flexibility, and continuity in the operations of the business. Therefore, it is essential for partners to clearly define this element in their partnership agreement to ensure a smooth and successful partnership.
Active partner is one who:- a)Takes part in the business of the firm
- b)Actively participates in co-curricular activities
- c)Actively shares the profits
- d)Makes a show of authority
Correct answer is option 'A'. Can you explain this answer?
Active partner is one who:
a)
Takes part in the business of the firm
b)
Actively participates in co-curricular activities
c)
Actively shares the profits
d)
Makes a show of authority
|
|
Ankita Mukherjee answered |
Understanding Active Partners in a Partnership Firm
In the context of a partnership, the term "active partner" refers specifically to an individual who plays a significant role in the daily operations and management of the business. Here's a detailed explanation:
Definition of an Active Partner
- An active partner is someone who is directly involved in the day-to-day activities of the firm. This includes making important decisions, managing operations, and overseeing the workforce.
- They contribute their skills, expertise, and time to ensure the business functions smoothly and efficiently.
Key Characteristics of Active Partners
- **Participation in Business Operations:** They engage in various business activities such as marketing, accounting, and customer service. This active involvement helps in driving the business forward.
- **Decision-Making Role:** Active partners often have a say in strategic planning and operational decisions, influencing the direction of the firm.
- **Liability and Responsibility:** They assume a higher level of responsibility and liability compared to silent or dormant partners, who do not engage in daily operations.
Comparison with Other Types of Partners
- **Silent/Dormant Partners:** Unlike active partners, silent partners invest capital but do not participate in management or operations.
- **Limited Partners:** These partners have limited involvement and liability, primarily focusing on their financial investment rather than operational duties.
Conclusion
In conclusion, an active partner is integral to the firm's success, as they are directly involved in its operations and decision-making processes. Their engagement ensures the firm runs effectively and remains competitive in the market. Understanding this role is crucial for anyone studying partnership structures in business.
In the context of a partnership, the term "active partner" refers specifically to an individual who plays a significant role in the daily operations and management of the business. Here's a detailed explanation:
Definition of an Active Partner
- An active partner is someone who is directly involved in the day-to-day activities of the firm. This includes making important decisions, managing operations, and overseeing the workforce.
- They contribute their skills, expertise, and time to ensure the business functions smoothly and efficiently.
Key Characteristics of Active Partners
- **Participation in Business Operations:** They engage in various business activities such as marketing, accounting, and customer service. This active involvement helps in driving the business forward.
- **Decision-Making Role:** Active partners often have a say in strategic planning and operational decisions, influencing the direction of the firm.
- **Liability and Responsibility:** They assume a higher level of responsibility and liability compared to silent or dormant partners, who do not engage in daily operations.
Comparison with Other Types of Partners
- **Silent/Dormant Partners:** Unlike active partners, silent partners invest capital but do not participate in management or operations.
- **Limited Partners:** These partners have limited involvement and liability, primarily focusing on their financial investment rather than operational duties.
Conclusion
In conclusion, an active partner is integral to the firm's success, as they are directly involved in its operations and decision-making processes. Their engagement ensures the firm runs effectively and remains competitive in the market. Understanding this role is crucial for anyone studying partnership structures in business.
Partnership cannot be formed between - a)Two artificial persons
- b)Naturally borne and artificial persons
- c)Between two naturally borne persons
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
Partnership cannot be formed between
a)
Two artificial persons
b)
Naturally borne and artificial persons
c)
Between two naturally borne persons
d)
None of the above
|
|
Arun Khanna answered |
A firm as such cannot enter into an agreement as a partner with another firm or individuals. And agreement between partners to carry on a business and to share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein.
Partnership deed is also called as:- a)Partnership document
- b)Articles of Partnership
- c)Both of the above
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
Partnership deed is also called as:
a)
Partnership document
b)
Articles of Partnership
c)
Both of the above
d)
None of the above
|
Jayant Mishra answered |
A partnership deed, also known as a partnership agreement, is a document that outlines in detail the rights and responsibilities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business.
A introduces B to C as a partner in his firm. B, in fact is not a partner but did not deny the fact. C advanced a loan to A, which he (A) could not pay back. C held B liable for repayment of loan because: B is a- a)Sleeping partner
- b)Sub Partner
- c)Dormant partner
- d)Partner by estoppel or Holding out
Correct answer is option 'D'. Can you explain this answer?
A introduces B to C as a partner in his firm. B, in fact is not a partner but did not deny the fact. C advanced a loan to A, which he (A) could not pay back. C held B liable for repayment of loan because: B is a
a)
Sleeping partner
b)
Sub Partner
c)
Dormant partner
d)
Partner by estoppel or Holding out
|
Bhaskar Sharma answered |
Partner by Estoppel or Holding Out
When A introduced B to C as a partner in his firm, B did not deny this fact. This creates a situation of "holding out" or "estoppel." This means that B is held liable as a partner, even though he is not actually a partner, because he allowed A to hold him out as one.
Explanation
When a person is held out by a partner or a firm as a partner, they are considered a partner by estoppel. This means that they are held liable for the debts and obligations of the firm, even if they are not a partner in reality. This principle is based on the legal principle of estoppel, which prevents a person from denying or contradicting something they have previously said or done.
In this case, B did not deny being a partner when A introduced him to C. Therefore, C assumed that B was a partner and advanced a loan to A. When A failed to repay the loan, C held B liable for the repayment of the loan.
Conclusion
Partner by estoppel or holding out is a legal principle used to hold a person liable as a partner, even if they are not actually a partner. It is based on the principle of estoppel, which prevents a person from denying or contradicting something they have previously said or done. In this case, B allowed A to hold him out as a partner, and therefore, C held him liable for the repayment of the loan.
When A introduced B to C as a partner in his firm, B did not deny this fact. This creates a situation of "holding out" or "estoppel." This means that B is held liable as a partner, even though he is not actually a partner, because he allowed A to hold him out as one.
Explanation
When a person is held out by a partner or a firm as a partner, they are considered a partner by estoppel. This means that they are held liable for the debts and obligations of the firm, even if they are not a partner in reality. This principle is based on the legal principle of estoppel, which prevents a person from denying or contradicting something they have previously said or done.
In this case, B did not deny being a partner when A introduced him to C. Therefore, C assumed that B was a partner and advanced a loan to A. When A failed to repay the loan, C held B liable for the repayment of the loan.
Conclusion
Partner by estoppel or holding out is a legal principle used to hold a person liable as a partner, even if they are not actually a partner. It is based on the principle of estoppel, which prevents a person from denying or contradicting something they have previously said or done. In this case, B allowed A to hold him out as a partner, and therefore, C held him liable for the repayment of the loan.
Partnership Deed signifies: - a)Agreement between the parties
- b)Application to Registrar
- c)Certificate of Registered Partnership
- d)All of the above
Correct answer is option 'A'. Can you explain this answer?
Partnership Deed signifies:
a)
Agreement between the parties
b)
Application to Registrar
c)
Certificate of Registered Partnership
d)
All of the above
|
Divyanshu Saraf answered |
A because deed didnt contain any application to register or certificate it contains agreement bw partners
Can you explain the answer of this question below:M, is employed as a manager by a partnership firm ABC Brothers; M is entitled to a salary of Rs. 50,000 per month and 10% of profits of the firm only, if profits of the firm exceed Rs. 30 lakhs in a year. State whether M:
- A:
Be called a partner in the firm
- B:
Not to be called a partner in the firm
- C:
The appointment of M is invalid
- D:
M can claim only 50,000 per month but not a share in the profits of the firm
The answer is b.
M, is employed as a manager by a partnership firm ABC Brothers; M is entitled to a salary of Rs. 50,000 per month and 10% of profits of the firm only, if profits of the firm exceed Rs. 30 lakhs in a year. State whether M:
Be called a partner in the firm
Not to be called a partner in the firm
The appointment of M is invalid
M can claim only 50,000 per month but not a share in the profits of the firm
|
Tanya Mishra answered |
B is correct as if he will get share in profit which is 3 lac per annum but being a manager he gets 6 lac per annum so he will not be called partner of the firm
A partner may retire from an existing firm- a)with consent of all partners
- b)as per express agreement
- c)by written notice in partnership at will
- d)all of the above.
Correct answer is option 'D'. Can you explain this answer?
A partner may retire from an existing firm
a)
with consent of all partners
b)
as per express agreement
c)
by written notice in partnership at will
d)
all of the above.
|
|
Jatin Mehta answered |
Explanation:
A partner may retire from an existing firm in several ways, including with the consent of all partners, as per an express agreement, or by giving written notice in a partnership at will. The correct answer is option 'D', which states that all of these options are valid ways for a partner to retire.
Consent of all partners:
One way a partner may retire from a partnership is with the consent of all partners. This means that all the partners in the firm agree to the retirement of the partner. This can be done through a formal agreement or by mutual understanding among the partners.
Express agreement:
A partner may also retire from a firm as per an express agreement. This means that there may be a specific clause or provision in the partnership agreement that outlines the process and conditions for a partner to retire. This agreement may include details such as the notice period, the distribution of assets, and any other relevant terms.
Written notice in partnership at will:
In a partnership at will, which is a partnership without a specific duration or fixed term, a partner may retire by giving written notice to the other partners. This written notice serves as a formal announcement of the partner's intention to retire and triggers the process for the partner's exit from the firm.
Summary:
In conclusion, a partner may retire from an existing firm with the consent of all partners, as per an express agreement, or by giving written notice in a partnership at will. All of these options are valid ways for a partner to retire, making option 'D' the correct answer.
A partner may retire from an existing firm in several ways, including with the consent of all partners, as per an express agreement, or by giving written notice in a partnership at will. The correct answer is option 'D', which states that all of these options are valid ways for a partner to retire.
Consent of all partners:
One way a partner may retire from a partnership is with the consent of all partners. This means that all the partners in the firm agree to the retirement of the partner. This can be done through a formal agreement or by mutual understanding among the partners.
Express agreement:
A partner may also retire from a firm as per an express agreement. This means that there may be a specific clause or provision in the partnership agreement that outlines the process and conditions for a partner to retire. This agreement may include details such as the notice period, the distribution of assets, and any other relevant terms.
Written notice in partnership at will:
In a partnership at will, which is a partnership without a specific duration or fixed term, a partner may retire by giving written notice to the other partners. This written notice serves as a formal announcement of the partner's intention to retire and triggers the process for the partner's exit from the firm.
Summary:
In conclusion, a partner may retire from an existing firm with the consent of all partners, as per an express agreement, or by giving written notice in a partnership at will. All of these options are valid ways for a partner to retire, making option 'D' the correct answer.
A firm is the name of:- a)The Partners
- b)The minors in the firm.
- c)The business under which the firm carries on business
- d)The collective name under which it caries on business.
Correct answer is option 'D'. Can you explain this answer?
A firm is the name of:
a)
The Partners
b)
The minors in the firm.
c)
The business under which the firm carries on business
d)
The collective name under which it caries on business.
|
|
Snehal Das answered |
Explanation:
Collective Name of Business
A firm is a collective name under which a business carries on its operations. It is a legal entity that carries out business activities under a specific name. It can be a partnership firm, a limited liability partnership firm, or a company.
Different from Partners
A firm is different from its partners. The partners are individuals who own and run the business, whereas the firm is the entity that carries out the business activities. The partners may change, but the firm remains the same.
Legal Entity
A firm is a legal entity that is recognized by the law. It has its own identity, distinct from its partners. It can own property, enter into contracts, and sue or be sued in its own name.
Liability
The liability of the firm is separate from the liability of its partners. In a partnership firm, the partners have unlimited liability, which means that they are personally liable for the debts of the firm. In a limited liability partnership firm, the liability of the partners is limited to the extent of their capital contribution.
Conclusion
In summary, a firm is the collective name under which a business carries on its operations. It is a legal entity that is separate from its partners and has its own identity. The liability of the firm is separate from the liability of its partners.
Collective Name of Business
A firm is a collective name under which a business carries on its operations. It is a legal entity that carries out business activities under a specific name. It can be a partnership firm, a limited liability partnership firm, or a company.
Different from Partners
A firm is different from its partners. The partners are individuals who own and run the business, whereas the firm is the entity that carries out the business activities. The partners may change, but the firm remains the same.
Legal Entity
A firm is a legal entity that is recognized by the law. It has its own identity, distinct from its partners. It can own property, enter into contracts, and sue or be sued in its own name.
Liability
The liability of the firm is separate from the liability of its partners. In a partnership firm, the partners have unlimited liability, which means that they are personally liable for the debts of the firm. In a limited liability partnership firm, the liability of the partners is limited to the extent of their capital contribution.
Conclusion
In summary, a firm is the collective name under which a business carries on its operations. It is a legal entity that is separate from its partners and has its own identity. The liability of the firm is separate from the liability of its partners.
A new partner can be admitted in the firm with the consent of- a)All the partners
- b)Simple majority of partners
- c)Special majority of partners
- d)New partner only.
Correct answer is option 'A'. Can you explain this answer?
A new partner can be admitted in the firm with the consent of
a)
All the partners
b)
Simple majority of partners
c)
Special majority of partners
d)
New partner only.
|
Srsps answered |
Admitting a new partner in a firm:
- A new partner can be admitted in a firm with the consent of all the partners. This means that every existing partner must agree to admit a new partner.
- The consent of all the partners is required to ensure that there is unanimous agreement among the existing partners regarding the admission of a new partner.
- This requirement helps in maintaining the stability and harmony within the firm and ensures that all partners are on board with the decision.
- The consent of all the partners also helps in avoiding any potential conflicts or disagreements in the future regarding the admission of a new partner.
- The decision to admit a new partner is a significant one as it involves sharing profits, liabilities, and responsibilities. Therefore, it is important for all partners to be involved in the decision-making process.
Other options:
- Simple majority of partners: This means that more than half of the partners agree to admit a new partner. However, this option is not applicable in this case as the question specifies that the consent of all the partners is required.
- Special majority of partners: This means that a specific percentage or number of partners agree to admit a new partner. Again, this option is not applicable as the question specifies that the consent of all the partners is required.
- New partner only: This option is not valid as the question clearly states that the consent of all the partners is required, indicating that the decision must involve all existing partners.
In conclusion, a new partner can be admitted in a firm with the consent of all the partners. This ensures unanimous agreement and helps in maintaining stability and harmony within the firm.
- A new partner can be admitted in a firm with the consent of all the partners. This means that every existing partner must agree to admit a new partner.
- The consent of all the partners is required to ensure that there is unanimous agreement among the existing partners regarding the admission of a new partner.
- This requirement helps in maintaining the stability and harmony within the firm and ensures that all partners are on board with the decision.
- The consent of all the partners also helps in avoiding any potential conflicts or disagreements in the future regarding the admission of a new partner.
- The decision to admit a new partner is a significant one as it involves sharing profits, liabilities, and responsibilities. Therefore, it is important for all partners to be involved in the decision-making process.
Other options:
- Simple majority of partners: This means that more than half of the partners agree to admit a new partner. However, this option is not applicable in this case as the question specifies that the consent of all the partners is required.
- Special majority of partners: This means that a specific percentage or number of partners agree to admit a new partner. Again, this option is not applicable as the question specifies that the consent of all the partners is required.
- New partner only: This option is not valid as the question clearly states that the consent of all the partners is required, indicating that the decision must involve all existing partners.
In conclusion, a new partner can be admitted in a firm with the consent of all the partners. This ensures unanimous agreement and helps in maintaining stability and harmony within the firm.
A and B to divide the profits of a business equally but the loss, if any is to be borne by A Alone. The partnership agreement is-------.- a)Lawful
- b)Void
- c)Illegal
- d)Voidable
Correct answer is option 'A'. Can you explain this answer?
A and B to divide the profits of a business equally but the loss, if any is to be borne by A Alone. The partnership agreement is-------.
a)
Lawful
b)
Void
c)
Illegal
d)
Voidable
|
|
Sonal Patel answered |
Answer:
Partnership Agreement:
The partnership agreement mentioned in the question states that partners A and B will divide the profits of the business equally, but any loss incurred will be borne by partner A alone. This type of agreement is lawful.
Explanation:
In a partnership, the partners enter into an agreement to carry on a business together and share the profits and losses according to the terms of the partnership agreement. The agreement can be oral or written. In this case, the agreement specifies that profits will be divided equally between partners A and B, which means they will each receive an equal share of the profits.
However, the agreement also states that if there is any loss in the business, partner A will bear the entire loss alone. This means that partner B will not be responsible for any losses incurred by the business. While this may seem unfair to partner A, it is a valid provision in the partnership agreement.
Lawfulness of the Agreement:
The partnership agreement described in the question is lawful for the following reasons:
1. Freedom of Contract: Partnerships are based on the principle of freedom of contract, which allows partners to negotiate and agree on the terms of their partnership. As long as the agreement does not violate any laws, it is considered valid and enforceable.
2. Sharing of Profits and Losses: The agreement ensures that profits are shared equally between partners A and B, which is a fair and common practice in partnerships. This provision promotes cooperation and equal treatment between the partners.
3. Bearing of Losses: While it may seem unfair for partner A to bear all the losses alone, this provision is legally permissible. It is possible that partner A may have a higher risk tolerance or may have contributed more capital or expertise to the business, which justifies the unequal sharing of losses.
4. Consent of the Partners: It is assumed that partners A and B willingly entered into the agreement and agreed to its terms. As long as both partners are aware of and have consented to the terms of the agreement, it is considered lawful.
In conclusion, the partnership agreement described in the question is lawful because it is based on the principle of freedom of contract, ensures equal sharing of profits, and has the consent of both partners.
Partnership Agreement:
The partnership agreement mentioned in the question states that partners A and B will divide the profits of the business equally, but any loss incurred will be borne by partner A alone. This type of agreement is lawful.
Explanation:
In a partnership, the partners enter into an agreement to carry on a business together and share the profits and losses according to the terms of the partnership agreement. The agreement can be oral or written. In this case, the agreement specifies that profits will be divided equally between partners A and B, which means they will each receive an equal share of the profits.
However, the agreement also states that if there is any loss in the business, partner A will bear the entire loss alone. This means that partner B will not be responsible for any losses incurred by the business. While this may seem unfair to partner A, it is a valid provision in the partnership agreement.
Lawfulness of the Agreement:
The partnership agreement described in the question is lawful for the following reasons:
1. Freedom of Contract: Partnerships are based on the principle of freedom of contract, which allows partners to negotiate and agree on the terms of their partnership. As long as the agreement does not violate any laws, it is considered valid and enforceable.
2. Sharing of Profits and Losses: The agreement ensures that profits are shared equally between partners A and B, which is a fair and common practice in partnerships. This provision promotes cooperation and equal treatment between the partners.
3. Bearing of Losses: While it may seem unfair for partner A to bear all the losses alone, this provision is legally permissible. It is possible that partner A may have a higher risk tolerance or may have contributed more capital or expertise to the business, which justifies the unequal sharing of losses.
4. Consent of the Partners: It is assumed that partners A and B willingly entered into the agreement and agreed to its terms. As long as both partners are aware of and have consented to the terms of the agreement, it is considered lawful.
In conclusion, the partnership agreement described in the question is lawful because it is based on the principle of freedom of contract, ensures equal sharing of profits, and has the consent of both partners.
On which of the following grounds, a partner may apply to the court for dissolution of the firm?- a)Insanity of a partner
- b)Misconduct of a partner
- c)Perpetual losses in business
- d)All of the above.
Correct answer is option 'D'. Can you explain this answer?
On which of the following grounds, a partner may apply to the court for dissolution of the firm?
a)
Insanity of a partner
b)
Misconduct of a partner
c)
Perpetual losses in business
d)
All of the above.
|
|
Freedom Institute answered |
Grounds for dissolution of a firm:
There are several grounds on which a partner may apply to the court for dissolution of the firm. These grounds include:
1. Insanity of a partner:
- If a partner becomes mentally incapable of carrying out their duties and responsibilities, it can be a valid ground for dissolution.
- The court may dissolve the firm if it is determined that the partner's insanity makes it impossible to continue the business.
2. Misconduct of a partner:
- If a partner engages in misconduct that is detrimental to the firm or other partners, dissolution may be sought.
- Misconduct can include fraudulent activities, breach of fiduciary duty, or any other actions that harm the interests of the firm.
3. Perpetual losses in business:
- If the firm is consistently incurring losses and it becomes financially untenable to continue the business, dissolution may be necessary.
- The court may decide to dissolve the firm to protect the interests of the partners and creditors.
4. All of the above:
- It is important to note that partners may apply for dissolution based on any combination of the above grounds.
- If a partner can prove that any of these grounds exist, the court may order the dissolution of the firm.
In conclusion, a partner may apply to the court for dissolution of the firm on the grounds of insanity of a partner, misconduct of a partner, perpetual losses in business, or a combination of these grounds. The court will consider the evidence presented and make a decision based on the best interests of the partners and the firm.
There are several grounds on which a partner may apply to the court for dissolution of the firm. These grounds include:
1. Insanity of a partner:
- If a partner becomes mentally incapable of carrying out their duties and responsibilities, it can be a valid ground for dissolution.
- The court may dissolve the firm if it is determined that the partner's insanity makes it impossible to continue the business.
2. Misconduct of a partner:
- If a partner engages in misconduct that is detrimental to the firm or other partners, dissolution may be sought.
- Misconduct can include fraudulent activities, breach of fiduciary duty, or any other actions that harm the interests of the firm.
3. Perpetual losses in business:
- If the firm is consistently incurring losses and it becomes financially untenable to continue the business, dissolution may be necessary.
- The court may decide to dissolve the firm to protect the interests of the partners and creditors.
4. All of the above:
- It is important to note that partners may apply for dissolution based on any combination of the above grounds.
- If a partner can prove that any of these grounds exist, the court may order the dissolution of the firm.
In conclusion, a partner may apply to the court for dissolution of the firm on the grounds of insanity of a partner, misconduct of a partner, perpetual losses in business, or a combination of these grounds. The court will consider the evidence presented and make a decision based on the best interests of the partners and the firm.
Which of the following words can be used as a part of a firm name?- a)Crown
- b)Queen
- c)Royal
- d)Sterling
Correct answer is option 'D'. Can you explain this answer?
Which of the following words can be used as a part of a firm name?
a)
Crown
b)
Queen
c)
Royal
d)
Sterling
|
|
Arun Khanna answered |
The name in which the partners carry on their business is the firm name. A firm name can be anything as long as it does not go against the rules relating to trade name or goodwill. Section 58 (3) of the Indian Partnership Act. 1932 says that “A firm name shall not contain any of the following words, namely – ‘crown’, ‘Emperor’, ‘Empress’, ‘Implied’, ‘King’, ‘Queen’, ‘Royal’, or words expressing or implying the sanction, approach or patronage of government except when the State government signified its consent to the use of such words as part of the firm name by order in writing”.
A and B purchased a second hand car, get it renovated for selling and shared the proceeds equally. They are: - a)Partners
- b)Co-ventures
- c)Joint owner
- d)None
Correct answer is option 'C'. Can you explain this answer?
A and B purchased a second hand car, get it renovated for selling and shared the proceeds equally. They are:
a)
Partners
b)
Co-ventures
c)
Joint owner
d)
None
|
|
Vaishnavi Joshi answered |
Joint Ownership in Second Hand Car Business
In the given scenario, A and B purchased a second hand car, got it renovated for selling and shared the proceeds equally. Let's understand the nature of their business relationship.
Definition of Joint Ownership
Joint ownership is a situation where two or more people own a property or an asset together. In this case, each owner has a share in the property, which may or may not be equal. Joint ownership is often created by a contract or agreement between the parties involved.
Explanation of the Answer
In the given scenario, A and B purchased a second hand car together, which means they jointly own the car. They then got the car renovated for selling and shared the proceeds equally. This indicates that they are sharing the profits of the business equally, which is a characteristic of joint ownership.
Partnerships and Co-ventures
Partnerships and co-ventures are other types of business relationships, but they have different characteristics than joint ownership. In a partnership, two or more people own a business together and share the profits and losses of the business based on their agreed upon percentage ownership. In a co-venture, two or more parties collaborate on a specific project or venture, but they do not necessarily own the assets or property together.
Conclusion
In conclusion, A and B have a joint ownership relationship in their second hand car business. They jointly own the car and share the profits equally. It is important to understand the nature of the business relationship in order to determine the legal and financial responsibilities and obligations of the parties involved.
In the given scenario, A and B purchased a second hand car, got it renovated for selling and shared the proceeds equally. Let's understand the nature of their business relationship.
Definition of Joint Ownership
Joint ownership is a situation where two or more people own a property or an asset together. In this case, each owner has a share in the property, which may or may not be equal. Joint ownership is often created by a contract or agreement between the parties involved.
Explanation of the Answer
In the given scenario, A and B purchased a second hand car together, which means they jointly own the car. They then got the car renovated for selling and shared the proceeds equally. This indicates that they are sharing the profits of the business equally, which is a characteristic of joint ownership.
Partnerships and Co-ventures
Partnerships and co-ventures are other types of business relationships, but they have different characteristics than joint ownership. In a partnership, two or more people own a business together and share the profits and losses of the business based on their agreed upon percentage ownership. In a co-venture, two or more parties collaborate on a specific project or venture, but they do not necessarily own the assets or property together.
Conclusion
In conclusion, A and B have a joint ownership relationship in their second hand car business. They jointly own the car and share the profits equally. It is important to understand the nature of the business relationship in order to determine the legal and financial responsibilities and obligations of the parties involved.
Which of the following statement is not true about minor’s position as a partner1 . He cannot become a full fledged partner in a new firm2 . He can become a full fledged partner in an existing firm3 . He has to bear all liabilities like other partners4 . He can become a partner on becoming a major- a)1 & 2
- b)2 & 3
- c)3 & 4
- d)1 & 4
Correct answer is option 'B'. Can you explain this answer?
Which of the following statement is not true about minor’s position as a partner
1 . He cannot become a full fledged partner in a new firm
2 . He can become a full fledged partner in an existing firm
3 . He has to bear all liabilities like other partners
4 . He can become a partner on becoming a major
a)
1 & 2
b)
2 & 3
c)
3 & 4
d)
1 & 4
|
|
Freedom Institute answered |
Explanation:
The correct answer is option B: 2 & 3. Here's a detailed explanation:
1. He cannot become a full-fledged partner in a new firm: This statement is true. A minor, who is someone below the age of majority, cannot enter into a partnership agreement and therefore cannot become a full-fledged partner in a new firm.
2. He can become a full-fledged partner in an existing firm: This statement is true. Although a minor cannot initially become a partner, they can be admitted as a partner in an existing firm with the consent of all the existing partners.
3. He has to bear all liabilities like other partners: This statement is true. If a minor is admitted as a partner in an existing firm, they are liable for all the debts and obligations of the partnership, just like any other partner.
4. He can become a partner on becoming a major: This statement is not true. A minor does not automatically become a partner on reaching the age of majority. They would need to fulfill additional requirements and agreements to become a partner.
In conclusion, the statement that is not true about a minor's position as a partner is option B: 2 & 3.
The correct answer is option B: 2 & 3. Here's a detailed explanation:
1. He cannot become a full-fledged partner in a new firm: This statement is true. A minor, who is someone below the age of majority, cannot enter into a partnership agreement and therefore cannot become a full-fledged partner in a new firm.
2. He can become a full-fledged partner in an existing firm: This statement is true. Although a minor cannot initially become a partner, they can be admitted as a partner in an existing firm with the consent of all the existing partners.
3. He has to bear all liabilities like other partners: This statement is true. If a minor is admitted as a partner in an existing firm, they are liable for all the debts and obligations of the partnership, just like any other partner.
4. He can become a partner on becoming a major: This statement is not true. A minor does not automatically become a partner on reaching the age of majority. They would need to fulfill additional requirements and agreements to become a partner.
In conclusion, the statement that is not true about a minor's position as a partner is option B: 2 & 3.
A partnership firm is compulsorily dissolved where- a)All partners have become insolvent
- b)Firm’s business has become unlawful
- c)The fixed term has expired
- d)In cases (a) and (b) only.
Correct answer is option 'D'. Can you explain this answer?
A partnership firm is compulsorily dissolved where
a)
All partners have become insolvent
b)
Firm’s business has become unlawful
c)
The fixed term has expired
d)
In cases (a) and (b) only.
|
|
Freedom Institute answered |
Partnership Firm Dissolution:
Dissolution is the process of bringing an end to a partnership firm. There are various reasons that can lead to the dissolution of a partnership firm. Let's discuss the options given in the question and determine which one(s) are correct.
A: All partners have become insolvent:
- If all partners become insolvent, it means they are unable to pay their debts.
- Insolvency of all partners can lead to the dissolution of a partnership firm.
- This option is a valid reason for the compulsory dissolution of a partnership firm.
B: Firm's business has become unlawful:
- If the business of the partnership firm becomes unlawful due to changes in laws or regulations, it can lead to the dissolution of the firm.
- Operating an unlawful business is not legally acceptable, and therefore, the partnership firm may be compulsorily dissolved.
- This option is also a valid reason for the compulsory dissolution of a partnership firm.
C: The fixed term has expired:
- A partnership firm can be formed for a fixed term as mentioned in the partnership agreement.
- If the fixed term mentioned in the agreement expires, it does not compulsorily lead to the dissolution of the firm.
- The partners may choose to continue the partnership by renewing the agreement or dissolve the firm if they wish to do so.
- This option alone does not lead to compulsory dissolution.
D: In cases (a) and (b) only:
- This option is the combination of options A and B.
- As discussed earlier, both options A and B are valid reasons for the compulsory dissolution of a partnership firm.
- Therefore, option D is the correct answer.
In conclusion, a partnership firm is compulsorily dissolved when all partners become insolvent or when the firm's business becomes unlawful. The fixed term expiration does not necessarily lead to compulsory dissolution unless the partners decide to dissolve the firm. Therefore, option D, "In cases (a) and (b) only," is the correct answer.
Dissolution is the process of bringing an end to a partnership firm. There are various reasons that can lead to the dissolution of a partnership firm. Let's discuss the options given in the question and determine which one(s) are correct.
A: All partners have become insolvent:
- If all partners become insolvent, it means they are unable to pay their debts.
- Insolvency of all partners can lead to the dissolution of a partnership firm.
- This option is a valid reason for the compulsory dissolution of a partnership firm.
B: Firm's business has become unlawful:
- If the business of the partnership firm becomes unlawful due to changes in laws or regulations, it can lead to the dissolution of the firm.
- Operating an unlawful business is not legally acceptable, and therefore, the partnership firm may be compulsorily dissolved.
- This option is also a valid reason for the compulsory dissolution of a partnership firm.
C: The fixed term has expired:
- A partnership firm can be formed for a fixed term as mentioned in the partnership agreement.
- If the fixed term mentioned in the agreement expires, it does not compulsorily lead to the dissolution of the firm.
- The partners may choose to continue the partnership by renewing the agreement or dissolve the firm if they wish to do so.
- This option alone does not lead to compulsory dissolution.
D: In cases (a) and (b) only:
- This option is the combination of options A and B.
- As discussed earlier, both options A and B are valid reasons for the compulsory dissolution of a partnership firm.
- Therefore, option D is the correct answer.
In conclusion, a partnership firm is compulsorily dissolved when all partners become insolvent or when the firm's business becomes unlawful. The fixed term expiration does not necessarily lead to compulsory dissolution unless the partners decide to dissolve the firm. Therefore, option D, "In cases (a) and (b) only," is the correct answer.
Which of the following statements, about the registration of firm, is not true:- a)It must be done at the time of its formation.
- b)It may be done at the time of formation.
- c)It may be done before filing a suit against third party.
- d)It may be done at any time after its formation.
Correct answer is option 'A'. Can you explain this answer?
Which of the following statements, about the registration of firm, is not true:
a)
It must be done at the time of its formation.
b)
It may be done at the time of formation.
c)
It may be done before filing a suit against third party.
d)
It may be done at any time after its formation.
|
|
Freedom Institute answered |
Statement: Which of the following statements, about the registration of firm, is not true:
A: It must be done at the time of its formation.
B: It may be done at the time of formation.
C: It may be done before filing a suit against third party.
D: It may be done at any time after its formation.
Answer: A.
Explanation:
The registration of a firm refers to the process of legally establishing the firm as a separate legal entity. Here, we need to identify the statement that is not true.
A: It must be done at the time of its formation. (Not True)
This statement is not true because the registration of a firm is not mandatory at the time of its formation. It can be done at a later stage as well.
B: It may be done at the time of formation. (True)
This statement is true. The registration of a firm can be done at the time of its formation.
C: It may be done before filing a suit against a third party. (True)
This statement is true. The registration of a firm can be done before filing a suit against a third party.
D: It may be done at any time after its formation. (True)
This statement is true. The registration of a firm can be done at any time after its formation.
Therefore, the statement that is not true is A: It must be done at the time of its formation.
Can you explain the answer of this question below:Which of the following is not a kind of partner:
- A:
Dormant partner
- B:
Partners in losses only
- C:
Partner by estoppel
- D:
Nominal partner
The answer is b.
Which of the following is not a kind of partner:
Dormant partner
Partners in losses only
Partner by estoppel
Nominal partner
|
|
Pvs Chaitanya answered |
Because partners should share profits and losses is necessary condition so partner should take profits and losses if partners share only losses then they are not partners if a partner share only profit then he is not a partner with an exception of minir
A partnership at will is one1 . Duration not fixed2 . Duration fixed3 . Dissolved at any time4 . Can be dissolved only on the happening of an event- a)1 & 2
- b)2 & 3
- c)3 & 4
- d)1 & 3
Correct answer is option 'D'. Can you explain this answer?
A partnership at will is one
1 . Duration not fixed
2 . Duration fixed
3 . Dissolved at any time
4 . Can be dissolved only on the happening of an event
a)
1 & 2
b)
2 & 3
c)
3 & 4
d)
1 & 3
|
|
Freedom Institute answered |
Explanation:
A partnership at will refers to a partnership agreement where the duration of the partnership is not fixed. It means that the partnership can continue for an indefinite period of time until any of the partners decides to dissolve it.
The key characteristics of a partnership at will are as follows:
1. Duration not fixed: In a partnership at will, there is no predetermined or fixed duration for the partnership. It can continue for as long as the partners wish to carry on the business together.
2. Can be dissolved at any time: Since the duration is not fixed, any partner in a partnership at will has the right to dissolve the partnership at any time by giving notice to the other partners. No specific reason or event is required for dissolution.
3. Can be dissolved only on the happening of an event: This statement is incorrect as it contradicts the concept of a partnership at will. A partnership at will can be dissolved at any time without the occurrence of a specific event.
Based on the above explanation, the correct answer is D: 1 & 3, as a partnership at will is characterized by a duration not fixed and can be dissolved at any time.
A partnership at will refers to a partnership agreement where the duration of the partnership is not fixed. It means that the partnership can continue for an indefinite period of time until any of the partners decides to dissolve it.
The key characteristics of a partnership at will are as follows:
1. Duration not fixed: In a partnership at will, there is no predetermined or fixed duration for the partnership. It can continue for as long as the partners wish to carry on the business together.
2. Can be dissolved at any time: Since the duration is not fixed, any partner in a partnership at will has the right to dissolve the partnership at any time by giving notice to the other partners. No specific reason or event is required for dissolution.
3. Can be dissolved only on the happening of an event: This statement is incorrect as it contradicts the concept of a partnership at will. A partnership at will can be dissolved at any time without the occurrence of a specific event.
Based on the above explanation, the correct answer is D: 1 & 3, as a partnership at will is characterized by a duration not fixed and can be dissolved at any time.
The partnership firm having banking business becomes an illegal association when the number of partners in the firm Exceeds ______.- a)Ten
- b)Twenty
- c)Fifty
- d)Thousand.
Correct answer is option 'A'. Can you explain this answer?
The partnership firm having banking business becomes an illegal association when the number of partners in the firm Exceeds ______.
a)
Ten
b)
Twenty
c)
Fifty
d)
Thousand.
|
|
Deepika Nambiar answered |
**Explanation:**
In a partnership firm, the number of partners is governed by the Partnership Act, 1932. According to Section 11 of the Partnership Act, a partnership firm having banking business becomes an illegal association when the number of partners exceeds ten.
**Reasoning:**
1. **Partnership Act, 1932:** The Partnership Act, 1932 is the governing law for partnership firms in India. It provides rules and regulations regarding the formation, operation, and dissolution of partnership firms.
2. **Definition of Partnership:** According to Section 4 of the Partnership Act, a partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
3. **Formation of Partnership:** A partnership can be formed with a minimum of two partners and a maximum of twenty partners in the case of a general partnership. In the case of a banking business, the maximum number of partners allowed is ten.
4. **Banking Business:** Banking business refers to the business of accepting deposits of money, lending money, and providing other financial services like issuing credit cards, loans, etc.
5. **Illegal Association:** If the number of partners in a partnership firm exceeds the maximum limit allowed by law, the partnership becomes an illegal association.
6. **Consequences:** When a partnership firm becomes an illegal association, it loses its legal status and is not recognized by law. It cannot enforce its rights, and its contracts become void.
7. **Option A - Ten:** According to the Partnership Act, a partnership firm with banking business becomes an illegal association when the number of partners exceeds ten. Therefore, option A is the correct answer.
**Summary:**
A partnership firm having banking business becomes an illegal association when the number of partners in the firm exceeds ten. This is in accordance with the provisions of the Partnership Act, 1932. It is important for partnership firms to comply with the maximum limit of partners allowed by law to maintain their legal status and enforce their rights.
In a partnership firm, the number of partners is governed by the Partnership Act, 1932. According to Section 11 of the Partnership Act, a partnership firm having banking business becomes an illegal association when the number of partners exceeds ten.
**Reasoning:**
1. **Partnership Act, 1932:** The Partnership Act, 1932 is the governing law for partnership firms in India. It provides rules and regulations regarding the formation, operation, and dissolution of partnership firms.
2. **Definition of Partnership:** According to Section 4 of the Partnership Act, a partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
3. **Formation of Partnership:** A partnership can be formed with a minimum of two partners and a maximum of twenty partners in the case of a general partnership. In the case of a banking business, the maximum number of partners allowed is ten.
4. **Banking Business:** Banking business refers to the business of accepting deposits of money, lending money, and providing other financial services like issuing credit cards, loans, etc.
5. **Illegal Association:** If the number of partners in a partnership firm exceeds the maximum limit allowed by law, the partnership becomes an illegal association.
6. **Consequences:** When a partnership firm becomes an illegal association, it loses its legal status and is not recognized by law. It cannot enforce its rights, and its contracts become void.
7. **Option A - Ten:** According to the Partnership Act, a partnership firm with banking business becomes an illegal association when the number of partners exceeds ten. Therefore, option A is the correct answer.
**Summary:**
A partnership firm having banking business becomes an illegal association when the number of partners in the firm exceeds ten. This is in accordance with the provisions of the Partnership Act, 1932. It is important for partnership firms to comply with the maximum limit of partners allowed by law to maintain their legal status and enforce their rights.
X and Y formed a partnership firm to undertake construction of a Terminal for Northern Railway at Pune. This partnership is a:- a)Limited Partnership
- b)Partnership at Will
- c)Particular Partnership
- d)Joint venture
Correct answer is option 'C'. Can you explain this answer?
X and Y formed a partnership firm to undertake construction of a Terminal for Northern Railway at Pune. This partnership is a:
a)
Limited Partnership
b)
Partnership at Will
c)
Particular Partnership
d)
Joint venture
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Sameer Sharma answered |
Particular Partnership
Particular Partnership refers to a partnership formed for a specific purpose or project. In this case, X and Y formed a partnership firm specifically to undertake the construction of a Terminal for Northern Railway at Pune.
Characteristics of a Particular Partnership
- Formed for a specific project or purpose
- Limited in duration and scope
- Partners may not have intentions of continuing the partnership after the completion of the project
- Partners have a common goal or objective that brought them together
Distinguishing Particular Partnership from Other Types of Partnerships
- Limited Partnership: In a limited partnership, there are both general partners and limited partners, with different levels of liability and involvement. X and Y in this case do not indicate such a structure.
- Partnership at Will: Partnership at Will is a partnership without a specific duration or purpose. X and Y have a clear purpose for their partnership - the construction of the Terminal.
- Joint venture: Joint ventures involve two or more parties coming together for a specific business opportunity or project. While similar to a particular partnership, joint ventures often involve separate entities collaborating, whereas X and Y have formed a partnership firm.
In conclusion, the partnership between X and Y for the construction of the Terminal for Northern Railway at Pune fits the description of a Particular Partnership due to its specific purpose and limited scope.
Particular Partnership refers to a partnership formed for a specific purpose or project. In this case, X and Y formed a partnership firm specifically to undertake the construction of a Terminal for Northern Railway at Pune.
Characteristics of a Particular Partnership
- Formed for a specific project or purpose
- Limited in duration and scope
- Partners may not have intentions of continuing the partnership after the completion of the project
- Partners have a common goal or objective that brought them together
Distinguishing Particular Partnership from Other Types of Partnerships
- Limited Partnership: In a limited partnership, there are both general partners and limited partners, with different levels of liability and involvement. X and Y in this case do not indicate such a structure.
- Partnership at Will: Partnership at Will is a partnership without a specific duration or purpose. X and Y have a clear purpose for their partnership - the construction of the Terminal.
- Joint venture: Joint ventures involve two or more parties coming together for a specific business opportunity or project. While similar to a particular partnership, joint ventures often involve separate entities collaborating, whereas X and Y have formed a partnership firm.
In conclusion, the partnership between X and Y for the construction of the Terminal for Northern Railway at Pune fits the description of a Particular Partnership due to its specific purpose and limited scope.
A rented a house from X for carrying on the business of the firm. After one month A did not pay the rent. B and C are other partners of the firm. X can claim his rent from:- a)A only
- b)All the Partners
- c)B and C only
- d)A and C only
Correct answer is option 'B'. Can you explain this answer?
A rented a house from X for carrying on the business of the firm. After one month A did not pay the rent. B and C are other partners of the firm. X can claim his rent from:
a)
A only
b)
All the Partners
c)
B and C only
d)
A and C only
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Dashvanth Kumar answered |
Here A had taken the house from X for the purpose of carrying business on behalf of the firm and hence according to Indian Partnership Act 1932 any act done by any partner on behalf of the firm makes all the partners liable for that particular activity
A partnership firm having a banking business is a valid partnership when the number of partners exceeds: - a)5 but does not exceed 10
- b)10 But does not exceed 20
- c)20 but does not exceed 50
- d)20 but does not exceed 40
Correct answer is option 'A'. Can you explain this answer?
A partnership firm having a banking business is a valid partnership when the number of partners exceeds:
a)
5 but does not exceed 10
b)
10 But does not exceed 20
c)
20 but does not exceed 50
d)
20 but does not exceed 40
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Alok Mehta answered |
Earlier the Maximum Limit of Partners/Members was:-
In case of banking business – 10
In case of any other business – 20
Now the same has been simplified and the limit has been raised to 50 Partners/Members for any business.
X agrees with Y who is goldsmith to buy and furnish gold to Y, to be worked up by him and sold, and that they shall share in the resulting profit or loss. The contract between X and Y is that of- a)Partnership
- b)Association of goldsmith
- c)Contract for labour work
- d)Contract of Sale
Correct answer is option 'A'. Can you explain this answer?
X agrees with Y who is goldsmith to buy and furnish gold to Y, to be worked up by him and sold, and that they shall share in the resulting profit or loss. The contract between X and Y is that of
a)
Partnership
b)
Association of goldsmith
c)
Contract for labour work
d)
Contract of Sale
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Pallabi Khanna answered |
Contract Between X and Y is Partnership
The given scenario is an example of a partnership agreement between X and Y. Let's understand why it is a partnership agreement.
Definition of Partnership
Partnership is an agreement between two or more persons who agree to carry on a business venture together with the aim of earning profits. The persons who enter into the partnership agreement are known as partners.
Characteristics of Partnership
The following are the characteristics of a partnership agreement:
- Two or more persons are required to form a partnership.
- There must be an agreement between the partners.
- The aim of the partnership is to earn profits.
- The profits and losses are shared among the partners.
- The liability of the partners is unlimited.
- The partnership is dissolved on the death or insolvency of a partner.
Analysis of the Scenario
In the given scenario, X and Y have entered into an agreement to carry on a business venture together. X has agreed to furnish gold to Y, who is a goldsmith, to be worked up by him and sold. The profits and losses resulting from the sale of gold will be shared between X and Y.
Therefore, the given scenario fulfills all the characteristics of a partnership agreement:
- X and Y have agreed to carry on a business venture together.
- The aim of the partnership is to earn profits.
- The profits and losses resulting from the sale of gold will be shared between X and Y.
- The liability of the partners is unlimited.
Conclusion
Hence, it can be concluded that the contract between X and Y is a partnership agreement. In a partnership agreement, the partners share the risks and rewards of the business venture. It is important for the partners to have a clear understanding of their roles and responsibilities, as well as the terms and conditions of the partnership agreement.
The given scenario is an example of a partnership agreement between X and Y. Let's understand why it is a partnership agreement.
Definition of Partnership
Partnership is an agreement between two or more persons who agree to carry on a business venture together with the aim of earning profits. The persons who enter into the partnership agreement are known as partners.
Characteristics of Partnership
The following are the characteristics of a partnership agreement:
- Two or more persons are required to form a partnership.
- There must be an agreement between the partners.
- The aim of the partnership is to earn profits.
- The profits and losses are shared among the partners.
- The liability of the partners is unlimited.
- The partnership is dissolved on the death or insolvency of a partner.
Analysis of the Scenario
In the given scenario, X and Y have entered into an agreement to carry on a business venture together. X has agreed to furnish gold to Y, who is a goldsmith, to be worked up by him and sold. The profits and losses resulting from the sale of gold will be shared between X and Y.
Therefore, the given scenario fulfills all the characteristics of a partnership agreement:
- X and Y have agreed to carry on a business venture together.
- The aim of the partnership is to earn profits.
- The profits and losses resulting from the sale of gold will be shared between X and Y.
- The liability of the partners is unlimited.
Conclusion
Hence, it can be concluded that the contract between X and Y is a partnership agreement. In a partnership agreement, the partners share the risks and rewards of the business venture. It is important for the partners to have a clear understanding of their roles and responsibilities, as well as the terms and conditions of the partnership agreement.
X and Y purchase 10,000 bags of cement, which they agree to sell for their joint account.The relation between X and Y is- a)X and Y are partners
- b)X and Y are only joint owners
- c)X and Y are co-ventures
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
X and Y purchase 10,000 bags of cement, which they agree to sell for their joint account.The relation between X and Y is
a)
X and Y are partners
b)
X and Y are only joint owners
c)
X and Y are co-ventures
d)
None of the above
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Shivam Chawla answered |
The correct answer is option 'A', X and Y are partners. Let's understand why this is the case.
Partnership Definition:
A partnership is a legal relationship between two or more individuals who agree to carry on a business together and share its profits and losses.
Explanation:
In this scenario, X and Y have jointly purchased 10,000 bags of cement to sell for their joint account. This indicates that they have entered into a business venture together, where they both have an ownership interest in the cement bags and will share the profits and losses from the sales.
Here are the reasons why X and Y are partners:
1. Joint Ownership: X and Y have jointly purchased the cement bags, which means they both have a shared ownership interest in the inventory. This joint ownership establishes a partnership.
2. Agreement to Sell for Joint Account: X and Y have agreed to sell the cement bags for their joint account. This implies that they have mutually decided to conduct business together and share the results of the sales.
3. Profit and Loss Sharing: As partners, X and Y will share the profits and losses from the sales of the cement bags. This is a characteristic feature of a partnership, where the partners distribute the financial outcomes of the business venture.
4. Absence of Co-venture: Co-venture refers to a temporary collaboration between two or more parties for a specific project or purpose. In this scenario, there is no indication that X and Y are collaborating on a specific project or purpose. Instead, they have jointly purchased the cement bags for their joint account, suggesting a more ongoing and continuous business relationship.
Therefore, based on the given information, we can conclude that X and Y are partners in a business venture. They have a shared ownership interest, an agreement to sell for their joint account, and will share the profits and losses from the sales.
Partnership Definition:
A partnership is a legal relationship between two or more individuals who agree to carry on a business together and share its profits and losses.
Explanation:
In this scenario, X and Y have jointly purchased 10,000 bags of cement to sell for their joint account. This indicates that they have entered into a business venture together, where they both have an ownership interest in the cement bags and will share the profits and losses from the sales.
Here are the reasons why X and Y are partners:
1. Joint Ownership: X and Y have jointly purchased the cement bags, which means they both have a shared ownership interest in the inventory. This joint ownership establishes a partnership.
2. Agreement to Sell for Joint Account: X and Y have agreed to sell the cement bags for their joint account. This implies that they have mutually decided to conduct business together and share the results of the sales.
3. Profit and Loss Sharing: As partners, X and Y will share the profits and losses from the sales of the cement bags. This is a characteristic feature of a partnership, where the partners distribute the financial outcomes of the business venture.
4. Absence of Co-venture: Co-venture refers to a temporary collaboration between two or more parties for a specific project or purpose. In this scenario, there is no indication that X and Y are collaborating on a specific project or purpose. Instead, they have jointly purchased the cement bags for their joint account, suggesting a more ongoing and continuous business relationship.
Therefore, based on the given information, we can conclude that X and Y are partners in a business venture. They have a shared ownership interest, an agreement to sell for their joint account, and will share the profits and losses from the sales.
X and Y agree to work together as carpenters but X shall receive all profit and shall pay wages to Y. The relation between X and Y is that- a)Partners
- b)Carpenters
- c)Labourers
- d)Master-Servant
Correct answer is 'D'. Can you explain this answer?
X and Y agree to work together as carpenters but X shall receive all profit and shall pay wages to Y. The relation between X and Y is that
a)
Partners
b)
Carpenters
c)
Labourers
d)
Master-Servant
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Palak Choudhary answered |
Explanation:
Master-Servant relationship is a type of employment relationship where one person, the master, employs another person, the servant, to carry out work for them. In this situation, X is the master and Y is the servant.
Heading: Definition of Master-Servant relationship
- The Master-Servant relationship is a type of employment relationship where one person, the master, employs another person, the servant, to carry out work for them.
Heading: Characteristics of Master-Servant relationship
- The master has the right to control the work of the servant
- The master is responsible for paying the servant's wages
- The servant is obligated to carry out the work assigned to them by the master
Heading: Application of Master-Servant relationship in the given scenario
- In the given scenario, X is the master as they have the right to control the work of Y, who is the servant.
- X is responsible for paying Y's wages, which is a characteristic of the Master-Servant relationship.
- Y is obligated to carry out the work assigned to them by X.
Conclusion:
In conclusion, the relationship between X and Y in the given scenario is that of a Master-Servant relationship. X is the master, and Y is the servant. The Master-Servant relationship is a type of employment relationship where the master has the right to control the work of the servant, is responsible for paying the servant's wages, and the servant is obligated to carry out the work assigned to them by the master.
Master-Servant relationship is a type of employment relationship where one person, the master, employs another person, the servant, to carry out work for them. In this situation, X is the master and Y is the servant.
Heading: Definition of Master-Servant relationship
- The Master-Servant relationship is a type of employment relationship where one person, the master, employs another person, the servant, to carry out work for them.
Heading: Characteristics of Master-Servant relationship
- The master has the right to control the work of the servant
- The master is responsible for paying the servant's wages
- The servant is obligated to carry out the work assigned to them by the master
Heading: Application of Master-Servant relationship in the given scenario
- In the given scenario, X is the master as they have the right to control the work of Y, who is the servant.
- X is responsible for paying Y's wages, which is a characteristic of the Master-Servant relationship.
- Y is obligated to carry out the work assigned to them by X.
Conclusion:
In conclusion, the relationship between X and Y in the given scenario is that of a Master-Servant relationship. X is the master, and Y is the servant. The Master-Servant relationship is a type of employment relationship where the master has the right to control the work of the servant, is responsible for paying the servant's wages, and the servant is obligated to carry out the work assigned to them by the master.
Which of these statements is not true with respect to a Joint Hindu Family Business?- a)It can have female members
- b)A Joint Hindu Family firm arises on the basis of status i.e. Birth or by operation of law
- c)Death of a coparcener does not dissolve the Joint Hindu Family firm
- d)Coparcener is liable only to the extent of his share in the family property
Correct answer is option 'A'. Can you explain this answer?
Which of these statements is not true with respect to a Joint Hindu Family Business?
a)
It can have female members
b)
A Joint Hindu Family firm arises on the basis of status i.e. Birth or by operation of law
c)
Death of a coparcener does not dissolve the Joint Hindu Family firm
d)
Coparcener is liable only to the extent of his share in the family property
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Arjun Singhania answered |
Joint Hindu Family Business is a different type of organization, which is found only in India. As the name suggests, it is type of organization in which all the members of Hindu Undivided Family manage and control the business with the direction of head of the family. It is not a Partnership.
Under the Indian Partnership Act, 1932, partnership can be formed with - a)One Indian and two foreigners
- b)One major person and one person of unsound mind
- c)Two Convicts undergoing imprisonment
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
Under the Indian Partnership Act, 1932, partnership can be formed with
a)
One Indian and two foreigners
b)
One major person and one person of unsound mind
c)
Two Convicts undergoing imprisonment
d)
None of the above
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Aaryaan 46 answered |
Bkz all other answer is wrong ... bkz 2 convict never done partnership, one fine n one mental person's not in partnership act 1932
As per the accepted view, the registration of the firm is considered complete when.- a)Complete application for registration is filed with the Registrar.
- b)Registrar files the statement and makes entries in the Register of Firms.
- c)Registrar gives notice of registration to all partners.
- d)Court records the statement and certifies the entries in Register of Firms.
Correct answer is option 'B'. Can you explain this answer?
As per the accepted view, the registration of the firm is considered complete when.
a)
Complete application for registration is filed with the Registrar.
b)
Registrar files the statement and makes entries in the Register of Firms.
c)
Registrar gives notice of registration to all partners.
d)
Court records the statement and certifies the entries in Register of Firms.
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Mrinalini Iyer answered |
Explanation:
Filing of Complete Application:
- The first step in the registration process is to file a complete application for registration with the Registrar of Firms.
- This application typically includes details such as the name of the firm, the principal place of business, the names of all partners, and the date of commencement of the firm.
Registrar's Role:
- Once the complete application is filed, the Registrar of Firms reviews the application and verifies the information provided.
- If the Registrar finds the application to be in order and compliant with the requirements, he proceeds to file the statement and makes entries in the Register of Firms.
Completion of Registration:
- The registration of the firm is considered complete when the Registrar files the statement and makes entries in the Register of Firms.
- This step signifies that the firm is now officially registered under the relevant laws and regulations.
Notice of Registration:
- While the Registrar does not need to give notice of registration to all partners for the registration to be considered complete, it is a good practice to inform all partners of the successful registration.
Court's Role:
- The court does not play a direct role in the registration process of a firm. The registration is completed once the Registrar files the statement and makes entries in the Register of Firms.
In conclusion, the registration of a firm is considered complete when the Registrar of Firms files the statement and makes entries in the Register of Firms, indicating that the firm is now officially registered.
Filing of Complete Application:
- The first step in the registration process is to file a complete application for registration with the Registrar of Firms.
- This application typically includes details such as the name of the firm, the principal place of business, the names of all partners, and the date of commencement of the firm.
Registrar's Role:
- Once the complete application is filed, the Registrar of Firms reviews the application and verifies the information provided.
- If the Registrar finds the application to be in order and compliant with the requirements, he proceeds to file the statement and makes entries in the Register of Firms.
Completion of Registration:
- The registration of the firm is considered complete when the Registrar files the statement and makes entries in the Register of Firms.
- This step signifies that the firm is now officially registered under the relevant laws and regulations.
Notice of Registration:
- While the Registrar does not need to give notice of registration to all partners for the registration to be considered complete, it is a good practice to inform all partners of the successful registration.
Court's Role:
- The court does not play a direct role in the registration process of a firm. The registration is completed once the Registrar files the statement and makes entries in the Register of Firms.
In conclusion, the registration of a firm is considered complete when the Registrar of Firms files the statement and makes entries in the Register of Firms, indicating that the firm is now officially registered.
Which of the following statements is not true about minor’s position as a partner?- a)He cannot become a full-fledged partner in a new firm
- b)He can become a full-fledged partner in an existing firm
- c)He can be admitted only to the benefits of any existing firm.
- d)He can become partner on becoming a major.
Correct answer is option 'B'. Can you explain this answer?
Which of the following statements is not true about minor’s position as a partner?
a)
He cannot become a full-fledged partner in a new firm
b)
He can become a full-fledged partner in an existing firm
c)
He can be admitted only to the benefits of any existing firm.
d)
He can become partner on becoming a major.
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Rajeev Chaudhary answered |
Minors Position as a Partner
Minors, individuals who are under the age of 18, are generally not eligible to enter into legal contracts. However, there are certain exceptions to this rule. When it comes to minors becoming partners in a firm, there are specific conditions and limitations that apply.
The statement that is not true about a minor's position as a partner is option B, which states that a minor can become a full-fledged partner in an existing firm.
a) He cannot become a full-fledged partner in a new firm
A minor cannot become a full-fledged partner in a new firm. This is because minors lack the legal capacity to enter into a contract. Partnership agreements are considered contracts, and minors are generally not bound by them. Therefore, a minor cannot be a full-fledged partner in a new firm.
b) He can become a full-fledged partner in an existing firm
This statement is not true. Even in the case of an existing firm, a minor cannot become a full-fledged partner. As mentioned earlier, minors lack the capacity to enter into contracts, and partnership agreements are considered contracts. Therefore, a minor cannot have the full rights and responsibilities of a partner in an existing firm.
c) He can be admitted only to the benefits of any existing firm
A minor can be admitted to the benefits of any existing firm. This means that while a minor cannot be a full-fledged partner, they can still enjoy the profits and benefits of the partnership. However, they will not be personally liable for any of the firm's obligations.
d) He can become a partner on becoming a major
A minor can become a partner in a firm on becoming a major. Once a minor reaches the age of majority (usually 18 years old), they can choose to continue their partnership in the firm or withdraw from it. At this point, they have the legal capacity to enter into a contract, and hence can become a partner.
In conclusion, a minor cannot become a full-fledged partner in either a new or existing firm. However, they can be admitted to the benefits of an existing firm and can become a partner once they reach the age of majority.
Introduction
Minors, individuals who are under the age of 18, are generally not eligible to enter into legal contracts. However, there are certain exceptions to this rule. When it comes to minors becoming partners in a firm, there are specific conditions and limitations that apply.
Statement
The statement that is not true about a minor's position as a partner is option B, which states that a minor can become a full-fledged partner in an existing firm.
Explanation
a) He cannot become a full-fledged partner in a new firm
A minor cannot become a full-fledged partner in a new firm. This is because minors lack the legal capacity to enter into a contract. Partnership agreements are considered contracts, and minors are generally not bound by them. Therefore, a minor cannot be a full-fledged partner in a new firm.
b) He can become a full-fledged partner in an existing firm
This statement is not true. Even in the case of an existing firm, a minor cannot become a full-fledged partner. As mentioned earlier, minors lack the capacity to enter into contracts, and partnership agreements are considered contracts. Therefore, a minor cannot have the full rights and responsibilities of a partner in an existing firm.
c) He can be admitted only to the benefits of any existing firm
A minor can be admitted to the benefits of any existing firm. This means that while a minor cannot be a full-fledged partner, they can still enjoy the profits and benefits of the partnership. However, they will not be personally liable for any of the firm's obligations.
d) He can become a partner on becoming a major
A minor can become a partner in a firm on becoming a major. Once a minor reaches the age of majority (usually 18 years old), they can choose to continue their partnership in the firm or withdraw from it. At this point, they have the legal capacity to enter into a contract, and hence can become a partner.
In conclusion, a minor cannot become a full-fledged partner in either a new or existing firm. However, they can be admitted to the benefits of an existing firm and can become a partner once they reach the age of majority.
The position of a minor in a partnership firm is to be determined taking into account1 . The Indian Contract Act, 18722 . The Indian Partnership Act, 19323 . Minor’s agreement4 . The Majority Act, 1875- a)1 & 2
- b)2 & 3
- c)3 & 4
- d)1 & 4
Correct answer is option 'A'. Can you explain this answer?
The position of a minor in a partnership firm is to be determined taking into account
1 . The Indian Contract Act, 1872
2 . The Indian Partnership Act, 1932
3 . Minor’s agreement
4 . The Majority Act, 1875
a)
1 & 2
b)
2 & 3
c)
3 & 4
d)
1 & 4
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Freedom Institute answered |
The position of a minor in a partnership firm is determined by:
1. The Indian Contract Act, 1872: The Indian Contract Act provides guidelines regarding the capacity of a minor to enter into a contract. According to Section 11 of the Act, a minor is not competent to enter into a contract, and any agreement made by a minor is void ab initio. Therefore, a minor cannot become a partner in a partnership firm as it involves entering into a contractual agreement.
2. The Indian Partnership Act, 1932: The Indian Partnership Act governs the formation and operation of partnership firms in India. According to Section 30 of the Act, a person who is not competent to contract, such as a minor, cannot be a partner in a firm. However, a minor can be admitted to the benefits of partnership with the consent of all the partners. In such a case, the minor does not have any liability for the debts and obligations of the firm.
3. Minor's agreement: Although a minor cannot enter into a valid contract, the Indian Partnership Act allows a minor to enter into a partnership agreement with the consent of all the partners. This agreement is known as a "minor's agreement." It specifies the rights and benefits that the minor will receive from the partnership, without imposing any liability on the minor for the firm's debts.
4. The Majority Act, 1875: The Majority Act defines the age of majority in India. According to the Act, a person attains majority at the age of 18. This means that a minor below the age of 18 cannot be a partner in a partnership firm.
Therefore, the correct answer is option A: 1 & 2. The position of a minor in a partnership firm is determined by the Indian Contract Act and the Indian Partnership Act. The minor's agreement and the Majority Act are also relevant in understanding the rights and limitations of a minor in a partnership.
1. The Indian Contract Act, 1872: The Indian Contract Act provides guidelines regarding the capacity of a minor to enter into a contract. According to Section 11 of the Act, a minor is not competent to enter into a contract, and any agreement made by a minor is void ab initio. Therefore, a minor cannot become a partner in a partnership firm as it involves entering into a contractual agreement.
2. The Indian Partnership Act, 1932: The Indian Partnership Act governs the formation and operation of partnership firms in India. According to Section 30 of the Act, a person who is not competent to contract, such as a minor, cannot be a partner in a firm. However, a minor can be admitted to the benefits of partnership with the consent of all the partners. In such a case, the minor does not have any liability for the debts and obligations of the firm.
3. Minor's agreement: Although a minor cannot enter into a valid contract, the Indian Partnership Act allows a minor to enter into a partnership agreement with the consent of all the partners. This agreement is known as a "minor's agreement." It specifies the rights and benefits that the minor will receive from the partnership, without imposing any liability on the minor for the firm's debts.
4. The Majority Act, 1875: The Majority Act defines the age of majority in India. According to the Act, a person attains majority at the age of 18. This means that a minor below the age of 18 cannot be a partner in a partnership firm.
Therefore, the correct answer is option A: 1 & 2. The position of a minor in a partnership firm is determined by the Indian Contract Act and the Indian Partnership Act. The minor's agreement and the Majority Act are also relevant in understanding the rights and limitations of a minor in a partnership.
A and B purchased a second hand car, get it renovated for selling and shared the proceeds equally. They are: - a)Partners
- b)Co-ventures
- c)Joint owner
- d)None
Correct answer is option 'C'. Can you explain this answer?
A and B purchased a second hand car, get it renovated for selling and shared the proceeds equally. They are:
a)
Partners
b)
Co-ventures
c)
Joint owner
d)
None
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Jayant Mishra answered |
JOINT OWNER
Right of ownership shared by two or more owners such that on the death of an owner his or right passes on to surviving owner(s), the last survivor becoming the full owner.
Right of ownership shared by two or more owners such that on the death of an owner his or right passes on to surviving owner(s), the last survivor becoming the full owner.
The maximum numbers of partners is mentioned- a)The Partnership Act
- b)The Companies Act
- c)The Societies Registration Act
- d)The Limited Liability Partnership Act
Correct answer is option 'B'. Can you explain this answer?
The maximum numbers of partners is mentioned
a)
The Partnership Act
b)
The Companies Act
c)
The Societies Registration Act
d)
The Limited Liability Partnership Act
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Suhani Dangarh answered |
Yes it is mentioned in companies act 2013 alongwith rule no.10 of companies rules
Raj and Ram, two friends buy hundred mobile sets agreeing to share the same between them. It is a : - a)Co-ownership
- b)Partnership
- c)Joint venture
- d)Hindu undivided family business
Correct answer is option 'A'. Can you explain this answer?
Raj and Ram, two friends buy hundred mobile sets agreeing to share the same between them. It is a :
a)
Co-ownership
b)
Partnership
c)
Joint venture
d)
Hindu undivided family business
|
|
Akshay Das answered |
Co-ownership
Co-ownership means two or more people owning a property jointly. In this case, Raj and Ram have jointly bought hundred mobile sets. They have agreed to share the mobile sets between themselves.
Features of co-ownership:
- Joint ownership: Both Raj and Ram jointly own the mobile sets.
- Equal rights: Both Raj and Ram have equal rights over the mobile sets.
- Sharing of profits: Any profit earned from the mobile sets will be shared equally between Raj and Ram.
- Sharing of expenses: Any expenses incurred on the mobile sets will be shared equally between Raj and Ram.
Advantages of co-ownership:
- Shared responsibility: Both Raj and Ram share the responsibility of owning the mobile sets.
- Equal rights: Both Raj and Ram have equal rights over the mobile sets.
- Sharing of profits: Any profit earned from the mobile sets will be shared equally between Raj and Ram.
Disadvantages of co-ownership:
- Disagreements: There may be disagreements between Raj and Ram on how to use the mobile sets or how to share the profits.
- Limited scope: Co-ownership may be limited in scope as it is applicable only to jointly owned property.
Conclusion:
In this case, Raj and Ram have entered into a co-ownership agreement to jointly own hundred mobile sets. They will share the profits and expenses equally. Co-ownership is a good option when two or more people want to jointly own a property or asset.
Co-ownership means two or more people owning a property jointly. In this case, Raj and Ram have jointly bought hundred mobile sets. They have agreed to share the mobile sets between themselves.
Features of co-ownership:
- Joint ownership: Both Raj and Ram jointly own the mobile sets.
- Equal rights: Both Raj and Ram have equal rights over the mobile sets.
- Sharing of profits: Any profit earned from the mobile sets will be shared equally between Raj and Ram.
- Sharing of expenses: Any expenses incurred on the mobile sets will be shared equally between Raj and Ram.
Advantages of co-ownership:
- Shared responsibility: Both Raj and Ram share the responsibility of owning the mobile sets.
- Equal rights: Both Raj and Ram have equal rights over the mobile sets.
- Sharing of profits: Any profit earned from the mobile sets will be shared equally between Raj and Ram.
Disadvantages of co-ownership:
- Disagreements: There may be disagreements between Raj and Ram on how to use the mobile sets or how to share the profits.
- Limited scope: Co-ownership may be limited in scope as it is applicable only to jointly owned property.
Conclusion:
In this case, Raj and Ram have entered into a co-ownership agreement to jointly own hundred mobile sets. They will share the profits and expenses equally. Co-ownership is a good option when two or more people want to jointly own a property or asset.
A finder of lost goods can realise the goods if true owner cannot be found with ______.- a)Reasonable diligence
- b)Ordinary diligence
- c)Lack of diligence
- d)Due diligence
Correct answer is option 'A'. Can you explain this answer?
A finder of lost goods can realise the goods if true owner cannot be found with ______.
a)
Reasonable diligence
b)
Ordinary diligence
c)
Lack of diligence
d)
Due diligence
|
|
Freedom Institute answered |
A Finder of goods has the power to sell the goods to give good title to the Buyer, if the owner of goods cannot be found with reasonable diligence. Reasonable diligence refers to the due diligence. It refers to he care expected from a logical and reasonable person.
Death of partner has the effect of____________- a)Dissolving the firm
- b)Result in continuance of the business of the firm
- c)His heirs joining the firm
- d)Computation of profits upto the date of death
Correct answer is 'D'. Can you explain this answer?
Death of partner has the effect of____________
a)
Dissolving the firm
b)
Result in continuance of the business of the firm
c)
His heirs joining the firm
d)
Computation of profits upto the date of death
|
Aman Chaudhary answered |
Effect of Death of Partner in a Firm
When a partner of a firm dies, it has certain effects on the firm. These effects are as follows:
Continuance of the Business
- The death of a partner does not dissolve the firm, and the business of the firm continues.
- The remaining partners continue the business according to the terms and conditions of the partnership agreement.
- If there is no partnership agreement, the business continues as per the provisions of the Partnership Act, 1932.
Computation of Profits
- The profits of the firm are calculated up to the date of death of the partner.
- The deceased partner's share of the profits up to the date of death is calculated and paid to his or her legal heirs.
Admission of Heirs
- The legal heirs of the deceased partner may be admitted as partners in the firm with the consent of all the existing partners.
- This may require the reconstitution of the firm and amendment of the partnership agreement.
Conclusion
In conclusion, the death of a partner in a firm does not automatically dissolve the firm, and the business continues. The profits are calculated up to the date of death, and the legal heirs may be admitted as partners with the consent of all existing partners.
When a partner of a firm dies, it has certain effects on the firm. These effects are as follows:
Continuance of the Business
- The death of a partner does not dissolve the firm, and the business of the firm continues.
- The remaining partners continue the business according to the terms and conditions of the partnership agreement.
- If there is no partnership agreement, the business continues as per the provisions of the Partnership Act, 1932.
Computation of Profits
- The profits of the firm are calculated up to the date of death of the partner.
- The deceased partner's share of the profits up to the date of death is calculated and paid to his or her legal heirs.
Admission of Heirs
- The legal heirs of the deceased partner may be admitted as partners in the firm with the consent of all the existing partners.
- This may require the reconstitution of the firm and amendment of the partnership agreement.
Conclusion
In conclusion, the death of a partner in a firm does not automatically dissolve the firm, and the business continues. The profits are calculated up to the date of death, and the legal heirs may be admitted as partners with the consent of all existing partners.
Interest on capital will be allowed only when: - a)There are heavy losses in the firm
- b)There are no profits and no losses
- c)There are profits
- d)Always
Correct answer is option 'C'. Can you explain this answer?
Interest on capital will be allowed only when:
a)
There are heavy losses in the firm
b)
There are no profits and no losses
c)
There are profits
d)
Always
|
|
Prathap Venkateswarlu answered |
According to the rules of the partnership accounts when interest should be shared only when profits
Which of the following is not disability of an unregistered firm?- a)It cannot file a suit against third parties
- b)Its partners cannot file a suit against a firm.
- c)It cannot claim a set-off exceeding Rs. 100.
- d)It cannot be sued by a third party.
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not disability of an unregistered firm?
a)
It cannot file a suit against third parties
b)
Its partners cannot file a suit against a firm.
c)
It cannot claim a set-off exceeding Rs. 100.
d)
It cannot be sued by a third party.
|
|
Maheshwar Sharma answered |
Unregistered firms refer to partnerships that are not registered under the Partnership Act, 1932. These firms lack the legal recognition and protection that registered firms enjoy. While there are several disabilities associated with unregistered firms, the correct answer is option D, which states that an unregistered firm cannot be sued by a third party.
Explanation:
Unregistered firms face certain limitations and disabilities due to their lack of legal recognition. Let's examine each option to understand the disabilities of an unregistered firm:
a) It cannot file a suit against third parties:
- This is a disability of an unregistered firm. Since it lacks legal recognition, it cannot file a suit against third parties to enforce its rights or seek remedies.
b) Its partners cannot file a suit against a firm:
- This is also a disability of an unregistered firm. The partners of an unregistered firm cannot file a suit against the firm to enforce their rights or seek remedies.
c) It cannot claim a set-off exceeding Rs. 100:
- This is another disability of an unregistered firm. A set-off refers to the adjustment of mutual debts between the firm and a third party. An unregistered firm cannot claim a set-off exceeding Rs. 100, meaning it cannot offset debts exceeding this amount against amounts owed to it.
d) It cannot be sued by a third party:
- This statement is incorrect. An unregistered firm can indeed be sued by a third party. Even though the firm lacks legal recognition, it can still be held liable for its actions and can be sued by third parties to seek remedies or claim damages.
Therefore, the correct answer is option D, as it incorrectly states that an unregistered firm cannot be sued by a third party. In reality, an unregistered firm can be held legally accountable and can be sued by third parties.
Explanation:
Unregistered firms face certain limitations and disabilities due to their lack of legal recognition. Let's examine each option to understand the disabilities of an unregistered firm:
a) It cannot file a suit against third parties:
- This is a disability of an unregistered firm. Since it lacks legal recognition, it cannot file a suit against third parties to enforce its rights or seek remedies.
b) Its partners cannot file a suit against a firm:
- This is also a disability of an unregistered firm. The partners of an unregistered firm cannot file a suit against the firm to enforce their rights or seek remedies.
c) It cannot claim a set-off exceeding Rs. 100:
- This is another disability of an unregistered firm. A set-off refers to the adjustment of mutual debts between the firm and a third party. An unregistered firm cannot claim a set-off exceeding Rs. 100, meaning it cannot offset debts exceeding this amount against amounts owed to it.
d) It cannot be sued by a third party:
- This statement is incorrect. An unregistered firm can indeed be sued by a third party. Even though the firm lacks legal recognition, it can still be held liable for its actions and can be sued by third parties to seek remedies or claim damages.
Therefore, the correct answer is option D, as it incorrectly states that an unregistered firm cannot be sued by a third party. In reality, an unregistered firm can be held legally accountable and can be sued by third parties.
Which of the following is not the right of a partner i.e., which he cannot claim as a matter of right?- a)Right to take part in business.
- b)Right to have access to account books.
- c)Right to share profits.
- d)Right to receive remuneration.
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not the right of a partner i.e., which he cannot claim as a matter of right?
a)
Right to take part in business.
b)
Right to have access to account books.
c)
Right to share profits.
d)
Right to receive remuneration.
|
|
Srsps answered |
Right of a partner that cannot be claimed as a matter of right:
- Right to receive remuneration.
- A partner does not have an inherent right to receive remuneration for their participation in the partnership. The distribution of profits and the determination of partner salaries or wages are usually agreed upon in the partnership agreement or based on the partner's capital contribution.
- Remuneration can be negotiated and agreed upon between the partners, but it is not an automatic entitlement.
- The absence of a right to receive remuneration does not mean that partners cannot be compensated for their work or services. It simply means that it is not a guaranteed right and is subject to agreement or negotiation between the partners.
- Right to take part in business.
- Partners generally have the right to participate in the management and decision-making of the partnership.
- This right allows them to contribute to the strategic direction and day-to-day operations of the business.
- It is an essential aspect of being a partner and is usually outlined in the partnership agreement.
- Right to have access to account books.
- Partners have the right to access and inspect the partnership's account books and records.
- This right ensures transparency and allows partners to monitor the financial health and performance of the business.
- It also enables them to verify the accuracy of financial statements and ensure compliance with legal and contractual obligations.
- Right to share profits.
- Partners are entitled to a share of the profits generated by the partnership.
- The specific allocation of profits may be determined by the partnership agreement or based on the partner's capital contribution or agreed-upon percentages.
- This right reflects the financial benefits that partners receive in return for their investment and participation in the partnership.
In summary, the right that a partner cannot claim as a matter of right is the right to receive remuneration. While partners can be compensated for their work or services, it is not an automatic entitlement and is subject to agreement or negotiation between the partners.
- Right to receive remuneration.
- A partner does not have an inherent right to receive remuneration for their participation in the partnership. The distribution of profits and the determination of partner salaries or wages are usually agreed upon in the partnership agreement or based on the partner's capital contribution.
- Remuneration can be negotiated and agreed upon between the partners, but it is not an automatic entitlement.
- The absence of a right to receive remuneration does not mean that partners cannot be compensated for their work or services. It simply means that it is not a guaranteed right and is subject to agreement or negotiation between the partners.
- Right to take part in business.
- Partners generally have the right to participate in the management and decision-making of the partnership.
- This right allows them to contribute to the strategic direction and day-to-day operations of the business.
- It is an essential aspect of being a partner and is usually outlined in the partnership agreement.
- Right to have access to account books.
- Partners have the right to access and inspect the partnership's account books and records.
- This right ensures transparency and allows partners to monitor the financial health and performance of the business.
- It also enables them to verify the accuracy of financial statements and ensure compliance with legal and contractual obligations.
- Right to share profits.
- Partners are entitled to a share of the profits generated by the partnership.
- The specific allocation of profits may be determined by the partnership agreement or based on the partner's capital contribution or agreed-upon percentages.
- This right reflects the financial benefits that partners receive in return for their investment and participation in the partnership.
In summary, the right that a partner cannot claim as a matter of right is the right to receive remuneration. While partners can be compensated for their work or services, it is not an automatic entitlement and is subject to agreement or negotiation between the partners.
The reconstitution of the firm takes place in case- a)Admission of a partner
- b)Retirement of a partner
- c)Expulsion or death of a partner
- d)All of the above.
Correct answer is option 'D'. Can you explain this answer?
The reconstitution of the firm takes place in case
a)
Admission of a partner
b)
Retirement of a partner
c)
Expulsion or death of a partner
d)
All of the above.
|
|
Srsps answered |
The reconstitution of the firm takes place in case:
- Admission of a partner: When a new partner is added to the firm, it leads to the reconstitution of the firm. The existing partnership agreement may need to be modified or a new agreement may need to be created.
- Retirement of a partner: If a partner decides to retire from the firm, it results in the reconstitution of the firm. The remaining partners may need to make adjustments to the partnership agreement and redistribute profits and responsibilities.
- Expulsion of a partner: In the case of a partner being expelled from the firm due to misconduct or other reasons, the firm undergoes reconstitution. The remaining partners may need to revise the partnership agreement and make necessary changes to ensure the smooth functioning of the firm.
- Death of a partner: When a partner passes away, the firm goes through reconstitution. The partnership agreement needs to be reviewed and amended, and the deceased partner's share of profits and assets need to be settled.
- All of the above: The reconstitution of the firm can happen in any of the mentioned cases - admission, retirement, expulsion, or death of a partner.
Overall, the reconstitution of the firm is necessary whenever there is a change in the partnership structure due to the addition, withdrawal, or expulsion of partners, or due to the unfortunate event of a partner's death. The purpose of reconstitution is to ensure proper adjustments are made to the partnership agreement and to maintain the smooth functioning of the firm.
Chapter doubts & questions for Unit 1: General Nature of Partnership - Business Laws for CA Foundation 2025 is part of CA Foundation exam preparation. The chapters have been prepared according to the CA Foundation exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CA Foundation 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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Business Laws for CA Foundation
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