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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.
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Can you explain the answer of this question below:M, is employed as a ...
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
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Can you explain the answer of this question below:M, is employed as a ...
Answer:
To determine whether M can be called a partner in the firm ABC Brothers, we need to analyze the terms of M's employment and the legal requirements for being considered a partner in a partnership firm.
Terms of M's Employment:
- M is employed as a manager by ABC Brothers.
- M is entitled to a salary of Rs. 50,000 per month.
- M is entitled to 10% of the profits of the firm only if the profits exceed Rs. 30 lakhs in a year.
Legal Requirements for Being Considered a Partner:
To be considered a partner in a partnership firm, certain essential elements must be fulfilled. These elements include:
1. Mutual Agreement: There must be a mutual agreement among the partners to carry on a business and share the profits and losses.
2. Co-Ownership: The partners must co-own the business and contribute capital or assets.
3. Sharing of Profits and Losses: The partners must agree to share the profits and losses of the business.
4. Participation in Management: The partners must have the right to participate in the management of the business.
Analysis:
Based on the terms of M's employment and the legal requirements for being considered a partner, we can analyze the situation as follows:
- Mutual Agreement: M's employment as a manager implies an employer-employee relationship rather than a partnership agreement. Therefore, there may not be a mutual agreement among the partners to carry on a business and share the profits and losses with M.
- Co-Ownership: The information provided does not indicate that M has co-ownership in the firm. M is described as an employee rather than a co-owner.
- Sharing of Profits and Losses: M is entitled to 10% of the profits of the firm only if the profits exceed Rs. 30 lakhs in a year. This does not fulfill the requirement of sharing profits and losses as a partner would typically do.
- Participation in Management: M's role is described as a manager, which implies a managerial position rather than a partner's role in the management of the firm.
Conclusion:
Based on the analysis, it can be concluded that M should not be called a partner in the firm ABC Brothers. M's employment terms and the absence of essential elements of a partnership indicate that M does not meet the requirements to be considered a partner. Therefore, the correct answer is option 'B' - M should not be called a partner in the firm.
To determine whether M can be called a partner in the firm ABC Brothers, we need to analyze the terms of M's employment and the legal requirements for being considered a partner in a partnership firm.
Terms of M's Employment:
- M is employed as a manager by ABC Brothers.
- M is entitled to a salary of Rs. 50,000 per month.
- M is entitled to 10% of the profits of the firm only if the profits exceed Rs. 30 lakhs in a year.
Legal Requirements for Being Considered a Partner:
To be considered a partner in a partnership firm, certain essential elements must be fulfilled. These elements include:
1. Mutual Agreement: There must be a mutual agreement among the partners to carry on a business and share the profits and losses.
2. Co-Ownership: The partners must co-own the business and contribute capital or assets.
3. Sharing of Profits and Losses: The partners must agree to share the profits and losses of the business.
4. Participation in Management: The partners must have the right to participate in the management of the business.
Analysis:
Based on the terms of M's employment and the legal requirements for being considered a partner, we can analyze the situation as follows:
- Mutual Agreement: M's employment as a manager implies an employer-employee relationship rather than a partnership agreement. Therefore, there may not be a mutual agreement among the partners to carry on a business and share the profits and losses with M.
- Co-Ownership: The information provided does not indicate that M has co-ownership in the firm. M is described as an employee rather than a co-owner.
- Sharing of Profits and Losses: M is entitled to 10% of the profits of the firm only if the profits exceed Rs. 30 lakhs in a year. This does not fulfill the requirement of sharing profits and losses as a partner would typically do.
- Participation in Management: M's role is described as a manager, which implies a managerial position rather than a partner's role in the management of the firm.
Conclusion:
Based on the analysis, it can be concluded that M should not be called a partner in the firm ABC Brothers. M's employment terms and the absence of essential elements of a partnership indicate that M does not meet the requirements to be considered a partner. Therefore, the correct answer is option 'B' - M should not be called a partner in the firm.
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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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b.
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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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b..
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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 firmB:Not to be called a partner in the firmC:The appointment of M is invalidD:M can claim only 50,000 per month but not a share in the profits of the firmThe answer is b..
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