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Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.
Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?
- a)Yes.
- b)Yes, if Amar agrees to it.
- c)No, because other partners are still working.
- d)The court may not pass, because such a partner is not an active partner.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Amar, Akbar and Anthony jointly started business of supplying cottons ...
Answer:
Background:
Amar, Akbar, and Anthony are partners in a business of supplying cottons. They agreed to share profits equally through an oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.
Issue:
The issue in this scenario is whether the court can pass an order for dissolution if Anthony becomes insane and Akbar files a suit.
Analysis:
To determine whether the court can pass an order for dissolution, we need to consider the legal provisions regarding the dissolution of a partnership and the rights and liabilities of partners.
Legal provisions:
1. Partnership Act, 1932: This act governs the rights, duties, and liabilities of partners and provides provisions for the dissolution of a partnership.
Rights and liabilities of partners:
1. Active partners: Active partners are actively involved in the day-to-day operations and management of the business. They have the right to participate in the management and decision-making process of the partnership. They also have unlimited liability for the debts and obligations of the partnership.
2. Sleeping partner: A sleeping partner, also known as a dormant partner, is one who contributes capital to the partnership but does not participate in the management or decision-making process. They have limited liability and are not personally liable for the debts and obligations of the partnership.
Dissolution of partnership:
1. Dissolution by agreement: A partnership may be dissolved by mutual agreement of the partners.
2. Dissolution by court: The court can pass an order for the dissolution of a partnership under certain circumstances, including:
- Insanity of a partner: If a partner becomes insane, it may be a ground for dissolution as it may affect the smooth functioning and management of the partnership.
- Misconduct: If a partner engages in misconduct that affects the partnership's business or breaches the partnership agreement, the court may order dissolution.
- Incapacity: If a partner becomes incapacitated and is unable to fulfill their obligations, the court may order dissolution.
Answer:
The correct answer is option 'D' - The court may not pass an order for dissolution because such a partner is not an active partner.
Explanation:
In this case, Anthony is a sleeping partner, meaning he does not actively participate in the management or decision-making process. Therefore, his insanity does not directly affect the partnership's operations or management. As a sleeping partner, Anthony has limited liability and is not personally liable for the debts and obligations of the partnership.
Since Anthony's insanity does not impact the partnership's functionality, the court may not pass an order for dissolution based solely on this ground. The court may only consider dissolution if there are other valid grounds, such as misconduct or incapacity of a partner.
Background:
Amar, Akbar, and Anthony are partners in a business of supplying cottons. They agreed to share profits equally through an oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.
Issue:
The issue in this scenario is whether the court can pass an order for dissolution if Anthony becomes insane and Akbar files a suit.
Analysis:
To determine whether the court can pass an order for dissolution, we need to consider the legal provisions regarding the dissolution of a partnership and the rights and liabilities of partners.
Legal provisions:
1. Partnership Act, 1932: This act governs the rights, duties, and liabilities of partners and provides provisions for the dissolution of a partnership.
Rights and liabilities of partners:
1. Active partners: Active partners are actively involved in the day-to-day operations and management of the business. They have the right to participate in the management and decision-making process of the partnership. They also have unlimited liability for the debts and obligations of the partnership.
2. Sleeping partner: A sleeping partner, also known as a dormant partner, is one who contributes capital to the partnership but does not participate in the management or decision-making process. They have limited liability and are not personally liable for the debts and obligations of the partnership.
Dissolution of partnership:
1. Dissolution by agreement: A partnership may be dissolved by mutual agreement of the partners.
2. Dissolution by court: The court can pass an order for the dissolution of a partnership under certain circumstances, including:
- Insanity of a partner: If a partner becomes insane, it may be a ground for dissolution as it may affect the smooth functioning and management of the partnership.
- Misconduct: If a partner engages in misconduct that affects the partnership's business or breaches the partnership agreement, the court may order dissolution.
- Incapacity: If a partner becomes incapacitated and is unable to fulfill their obligations, the court may order dissolution.
Answer:
The correct answer is option 'D' - The court may not pass an order for dissolution because such a partner is not an active partner.
Explanation:
In this case, Anthony is a sleeping partner, meaning he does not actively participate in the management or decision-making process. Therefore, his insanity does not directly affect the partnership's operations or management. As a sleeping partner, Anthony has limited liability and is not personally liable for the debts and obligations of the partnership.
Since Anthony's insanity does not impact the partnership's functionality, the court may not pass an order for dissolution based solely on this ground. The court may only consider dissolution if there are other valid grounds, such as misconduct or incapacity of a partner.
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Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer?
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Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer?.
Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer?.
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ample number of questions to practice Amar, Akbar and Anthony jointly started business of supplying cottons and agreed to share profits equally through oral agreement on 01.03.2007. Amar and Akbar are active partners, while Anthony is a sleeping partner.Q.If Anthony becomes insane, and Akbar files a suit. Can the court pass an order for dissolution?a)Yes.b)Yes, if Amar agrees to it.c)No, because other partners are still working.d)The court may not pass, because such a partner is not an active partner.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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