350+ MCQ Question Bank on Partnership Act [Part 2]

201. Section 25 of the Indian Partnership Act, 1932, provides for
A. Liability of the firm for the acts of a partner
B. Liability of a partner for the acts of the firm
C. Liability of the firm for the wrongful acts of a partner
D. Rights of a partner

202. Where a partner is entitled to interest on the capital subscribed, such interest is payable
A. Out of profits only
B. Out of capital if no profits
C. Out of capital if losses
D. Either (A) or (B) or (C)

203. Section 44(g) of the Indian Partnership Act, 1932, is to be regarded as
A. Independent of section 44(a) to 44(f) of the Act
B. Ejusdem generis with sections 44(a) to 44(f) of the Act
C. Either (A) or (B)
D. Only (A) and not (B)

204. Which of the following suits can be maintained by one partner against the other partner during the subsistence of partnership without praying for dissolution
A. Suit in respect of any transaction which forms an item of the partnership account
B. Suit for money lent by him to a firm of which he is a member
C. Suit for contributions in respect of moneys borrowed by him under an express agreement with them for the purposes of partnership
D. All the above

205. Which of the following rights is not available to the transferee of a partners’ interest in the firm
A. To interfere in the conduct of business
B. To receive the profits which fall to the share of the transferring partner
C. Both (A) and (B)
D. Neither (A) nor (B)

206. Which of the following is not correct about a minor?
A. He cannot become a partner
B. He can be admitted to the benefits of partnership
C. He is personally liable for the acts of the firm
D. He can elect to become or not to become a partner on attaining the majority

207. Under section 49 of the Indian Partnership Act, 1932
A. The partnership property can be applied for payment of separate debts of a partner
B. The share of the partner in the partnership property can be applied for payment of separate debts of a partner
C. The share of the partner in the partnership property, after payment of firm debts, shall be applied for payment of separate debts of a partner
D. The share of the partner in the partnership property, after the payment of firm debts, shall not be paid to the partner if there are separate debts of the partner

208. Which of the following cases recognized the rule of vicarious liability of the firm for the wrongful acts or omissions of the partner done in the ordinary course of business.
A. Lloyd v. Grace Smith & Co.
B. Cox v. Hickman
C. Sadler v. Lee
D. Bentley v. Craven

209. A person is liable as a partner of a firm, on the principle of holding out, where he
A. Declares himself to be a partner of the firm
B. Represents himself to be a partner of the firm
C. Knowingly permits others to represent him as a partner in the firm
D. Either (A) or (B) or (C)

210. In a ‘Partnership will’
A. No provision is made by contract between partners for the duration of their partnership
B. No provision is made by contract between the partners for the determination of the partnership
C. Both A and B
D. None of the above

211. Where a partnership is dissolved by the death of a partner, in the absence of a provision expressly meant and clearly implied, a legal representative of the deceased partner is
A. Entitled to a share in the goodwill
B. Entitled to a share in the goodwill only with the consent of all other partners
C. Not entitled to a share in the goodwill at all
D. Entitled to a share in the goodwill only if the court so directs

212. Alterations in partnership deeds are to be brought to notice of
A. Sleeping partners
B. Registrar of Firms
C. Retired partners
D. None of the above

213. Which of the following Sections defines the doctrine of holding out, creating the liability of a ‘Non-partner’ under Indian Partnership Act?
A. Section 28
B. Section 29
C. Section 30
D. Section 31

214. In a suit for partnership accounts, all the partners and the legal representatives should be made parties and if a party is added after the ban of limitation
A. The suit shall be barred against that party only
B. The suit will be barred against all the parties
C. The suit shall continue against that party as well and the bar of limitation shall not operate
D. The suit will continue against the already impleaded parties

215. The position of a minor is provided under
A. Section 28
B. Section 30
C. Section 31
D. Section 32

216. A Partner of an unregistered Firm cannot sue the Firm or any other Partner of the Firm to enforce a right:
A. Arising from a contract
B. Conferred by the Partnership Act
C. Either (A) or (B)
D. Both (A) and (B)

217. Where the firm is not dissolved by the death of a partner, under section 35 of the Indian Partnership Act, 1932
A. The estate of the deceased partner is not liable for any act of the firm done after his death
B. The estate of the deceased partner is liable for the acts of the firm done after his death
C. The estate of the deceased partner is liable for acts of the firm which are within the implied authority of the partner
D. The estate of the deceased partner may or may not be liable for the acts of the firm depending on the contract between the partners

218. Section 23 of the Indian Partnership Act, 1932 provides that an admission made by a partner is an evidence
A. Against the partner
B. Against the firm
C. Against the managing partner
D. All the above

219. The principle of joint and several liability signifies that for every act of the firm, a partner can be sued
A. Individually
B. Jointly with other co-partners
C. Either (A) or (B)
D. Only (B) and not (A)

220. A, B and C enter into an agreement for partnership at will. The partnership deed contains the following provisions. Which one of the following provisions of the deed is inconsistent with partnership at will?
A. That there will be option for a surviving partner to purchase a deceased partner’s share at a fixed valuation
B. That disputes between the partners, if any, shall be referred to arbitration
C. That every partner will have a power to nominate his successor
D. That if any partner wants to retire from partnership, notice of a certain fixed time will be required before retirement

221. Which of the following cannot be claimed by a partner 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

222. In absence of a contract between the partners, after a firm being dissolved every partner or his representative has a right
A. To restrain any other partner or representatives from carrying on similar business in the firm name
B. Has no right to restrain any other partner or representatives from carrying on similar business in the firm name
C. Only (B) is correct
D. None of above

223. The period of limitation for a suit by a legal representative of the deceased partner for a share in the assets of the partnership is
A. Three years from the end of the financial year in which the death of the partner has taken place
B. Three years from the end of the calendar year in which the death of the partner has taken place
C. Three years from the death of the deceased partner
D. Either (A) or (B) or (C)

224. The court can order for dissolution of firm under section 44(d) of the Act, where a partner is guilty of
A. Wilful & persistent breach of agreement for management of affairs or conduct of business, of the firm
B. Conducting in such a manner making it not reasonably practical for other partners to carry on business in partnership with him
C. Either (A) or (B)
D. Both (A) and (B)

225. A person is liable as a partner of a partnership firm only if he is a partner by an express written contract.
A. No, a person is liable as a partner by an implied contract provided thereafter the implied contract is got registered before the Sub Registrar
B. No, a person is liable as a partner even by holding himself out as a partner of the partnership firm but only to that person who has on the faith of such holding out has given credit to the partnership firm
C. A person who holds himself out as a partner will be liable as a partner of the firm only when the third person who deals with the partnership firm has informed the person holding out that he is acting with the firm on the basis of such holding out
D. A person holding out is liable to a third person only if the third person has given a public notice

226. Is a partner entitled to receive remuneration for the conduct of the business of the firm?
A. Yes if there is such a contract between all the partners
B. No not under any circumstance
C. Yes if he alone is conducting the business of the firm
D. Yes if he is working more than others

227. Which of the following is not true of an Indian partnership?
A. It is result of an agreement
B. It is for carrying on a business
C. The partners agree to share profits
D. The business must be carried on and managed by all

228. A minor, who has been admitted to the benefits of the partnership, under Section 30(5) of the Indian Partnership Act on attaining majority has to exercise an option, to stay or to leave the firm, within
A. One month of attaining majority
B. Six months of attaining majority
C. 90 days of attaining majority
D. None of the above

229. Which of the following enactments insist for a written agreement of partnership
A. The Indian Partnership Act, 1932
B. The Indian Contract Act, 1872
C. The Indian Registration Act, 1908
D. Neither (A) nor (B) nor (C)

230. Assess the truth or falsity of the following statements by picking the right option under the Indian Partnership Act, 1932.
Statement I: Consent of all existing partners is generally required for introduction of a new partner into a firm.
Statement II: A partner may retire with the consent of all other partners in the firm.
A. Only Statement 1 is true
B. Only Statement 2 is true
C. Only 1 and 2 are true
D. Both 1 and 2 are false

231. Which of the following is not an essential element of partnership?
A. Contract between two or more persons
B. Contract must be to carry on some business
C. Contract must be to share profits of business
D. Business must actively be carried on by all the partners

232. Section 15 of the Indian Partnership Act is a statement of a
A. Right of the partners
B. Duty of the partners
C. Privilege of the partners
D. Liability of the partners

233. Where a partner becomes insolvent he ceases to be the partner in the firm
A. On the date on which order of adjudication in this regard is passed by a court of law
B. On the date which is agreed by him with other partners for declaring him insolvent
C. Either (A) or (B)
D. Both (A) and (B)

234. Partnership firm is created:
A. When the partners enter into an agreement to create a partnership firm for conduct of a business
B. When the business of the partnership firm is commenced
C. Both the conditions are necessary
D. Neither of the conditions is correct

235. The rule of facit relocation is contained in
A. Section 17 of the Indian Partnership Act
B. Section 15 of the Indian Partnership Act
C. Section 13 of the Indian Partnership Act
D. Section 11 of the Indian Partnership Act

236. Section 55(2) of the Indian Partnership Act, 1932 provides for
A. The right of the partners to sell the goodwill of the firm
B. Rights of the buyer and seller of the goodwill
C. Agreement in restrain of trade upon sale of goodwill
D. All the above

237. The changes/dissolution/election of the minor on attaining majority, of a firm, has to be notified to the Registrar within
A. Immediately on the occurrence
B. 60 days of the occurrence
C. 90 days of the occurrence
D. No time limit prescribed

238. Where a firm is named after the name of a partner, whether the partner intended to act for himself or for the firm, is
A. A question of fact
B. A question of law
C. A mixed question of fact and law
D. Either (B) or (C)

239. In Commissioner of Income Tax v. Jaya Lakshmi Rice & Oil Mills, AIR 1971 SC 1015, it has been held
A. Where a suit has been filed without registration, such suit can be rectified by subsequent registration
B. Where a suit has been filed without registration, such suit cannot be rectified by subsequent registration
C. Where a suit has been filed without registration, such suit can be rectified by subsequent registration with the leave of the court
D. Where a suit has been filed without registration, such suit cannot be rectified by subsequent registration with the leave of the court

240. The position of the partners, with respect to their liability for the acts of the firm, under section 25 of the Indian Partnership Act, 1932 is equated with
A. Joint tort-feasor
B. Joint promisors
C. Independent tort-feasors
D. All the above

241. Under section 19(1) of the Partnership Act, 1932, the acts of a partner which are done to carry on, in usual way, business of the kind carried on by the firm
A. Binds the firm
B. Binds the managing partner
C. Binds the sleeping partner
D. None of above

242. According to Section 11 of the Act, the mutual rights and duties of partners may be determined by
A. Contract between the Partners subject to the provisions of the Act
B. An express contract between the Partners
C. The provisions of the Act
D. None of the above

243. If a suit is filed for recovery and transaction is made subsequent to retirement of partners from firm but plaintiff is not aware of that fact then the partners
A. Cease to be as partners
B. Continue as partners and liable for transaction
C. Are known to be as sleeping partners
D. Are called as retired partners

244. The principles contained in section 37 of the Indian Partnership Act, 1932, apply where a partner ceases to be a partner by
A. Voluntary retirement from the firm
B. Death
C. Expulsion
D. Either (A) or (B) or (C)

245. A suit for dissolution of a firm on the ground of permanent incapability of a partner, under section 44(b) of the Act can be filed by
A. Any partner including the partner who has become permanently incapable
B. Any partner, other than the partner who has become permanently incapable
C. The partner who has become permanently incapable only
D. Only (A) and not (B) or (C)

246. Section 39 of the Indian Partnership Act, 1932, defines dissolution of a firm as
A. Dissolution between some of the partners of a firm
B. Dissolution between majority of the partners of a firm
C. Dissolution between all the partners of the firm
D. Either (A) or (B) or (C)

247. Section 32 of the Indian Partnership Act, 1932, deals with
A. Liability of new partner
B. Rights of new partner
C. Retirement of a partner
D. Insolvency of a partner

248. Section 12(c) of the Indian Partnership Act provides for a
A. Rule of majority
B. Rule of unanimity
C. Both (A) and (B)
D. Only (A) and not (B)

249. So long as a minor remains admitted to the benefits of the firm under section 30(4) of the Act, the minor is
A. Competent to sue the firm for account and payment of his share of profits of the firm
B. Competent to sue the firm for account and payment of his share of property of the firm
C. Competent to sue the firm for account and payment of his share of both profits and property of the firm
D. Incompetent to sue the firm for account or payment of his share either of profits or property of the firm

250. A partner can retire from a partnership by
A. Consent of all the partners
B. Where there is an agreement about retirement, in accordance with the terms of that agreement whether the other partners are willing or not
C. Giving a notice of his intention to retire
D. Either (A) or (B) or (C)

251. Can a minor be a partner of a firm
A. No
B. No but can be admitted to the benefits partnership
C. Yes
D. Yes but with the consent of all the partners

252. Admission made by a partner, in connection with the affairs of the firm and in the ordinary course of business of the firm, by virtue of section 23 of the Indian Partnership Act, 1932, are
A. Relevant and create estoppel
B. Relevant and conclusive
C. Relevant, create estoppel and are conclusive
D. Neither (A) nor (C)

253. The right to rescind the contract of partnership
A. Is an absolute one and cannot be lost
B. Is lost if the contract is not repudiated within a reasonable time of discovery of fraud
C. Is lost if the contract is not repudiated within one year of discovery of fraud
D. Is lost if the contract is not repudiated within 3 years of discovery of fraud

254. Section 49 of the Indian Partnership Act, 1932 provides for
A. Payment of separate debts of the partners in priority to payment of firm debts out of the partnership assets
B. Payment of firm debts in priority to payment of separate debts of the partners out of the partnership assets
C. Payment of firm debts and the separate debts of the partners simultaneously, out of the partnership assets
D. Payment of firm debts and the separate debts of the partners out of the partnership assets as per the directions of the court

255. In the absence of any agreement, the interest to partners on the amount of loan advanced to the firm, is allowed at
A. 8% per annum
B. 6% per annum
C. 4% per annum
D. Market rate

256. Where the notice of dissolution of the firm does not mention any date as the date of dissolution, the firm shall be dissolved on the date
A. On which the notice is sent
B. On which the notice is communicated
C. Which is decided by the partners
D. Fixed by the court

257. Distinction between retirement and dissolution as explained by the Supreme Court is in
A. CIT v.A. W. Figgis and Co.
B. Muralidhar v. CIT
C. CIT v. Shah Mohan Das Sadhuram
D. None of the above

258. The scope of implied authority of a partner under section 19 of the Indian Partnership Act is linked with
A. The kind or nature of the business
B. The usual manner of carrying on the business
C. Both (A) and (B)
D. Only (B) and not (A)

259. Section 30 of the Indian Partnership Act, 1932, applies
A. Where a partnership is constituted of two persons and one of them dies, and the other admits a minor to the benefits of the business
B. Where a minor is admitted to the benefits of subsisting partnership
C. Where a minor is admitted to the benefits of a future partnership
D. All the above

260. A partnership firm is . . . . . . . by acts of a partner who has been adjudicated insolvent
A. Not bound
B. Bound
C. Independent
D. Dependent

261. Which of the following is not a mode of dissolution of firm under Indian Partnership Act, 1932?
A. Dissolution by agreement
B. Compulsory dissolution
C. Dissolution by Registrar
D. Dissolution by Court
E. None of the above

262. Under Section 25 of the Indian Partnership Act, 1932 the liability of the partners for the acts of the firm is:
A. Joint and several
B. Several
C. Joint or several
D. Joint

263. Where the name of the firm and that of an individual partner of the firm is identical, the presumption is
A. In favour of the liability of the individual partner
B. In favour of the liability of the firm
C. In favour of the liability of the individual partner whose name is identical with that of the firm
D. Neither (A) nor (B)

264. The concept of partnership is commensurate with
A. Principal and agent
B. Co-owners of property
C. Joint owners of property
D. All the above

265. Sub-section (3) of section 32 of the Indian Partnership Act, 1932, requires that the retirement of a partner should be made known through
A. Notice to third parties specifically
B. Public notice
C. Notice to the partners
D. Either (A) or (B) or (C)

266. The court is empowered to order dissolution of a firm where it is just and equitable to dissolve the firm, under
A. Section 14(g) of the Act
B. Section 14(f) of the Act
C. Section 14(e) of the Act
D. Section 14(d) of the Act

267. Where an established partnership business is continued, without any further contract between the parties, after the death of one of the partners, the same shall be governed by
A. Section 13 of the Act
B. Section 17 of the Act
C. Section 13 and section 17
D. Section 16 of the Act

268. Which types of partnership have no agreement in terms of the duration of partnership?
A. Partnership-at-will
B. Limited partnership
C. General partnership
D. Particular partnership

269. Section 21 of the Indian Partnership Act, 1932 purports to
A. Extend the authority of a partner in emergency
B. Restrict the authority of a partner in emergency
C. Extend and restrict both, the authority of a partner in emergency
D. Either (A) or (B)

270. A partner may retire
A. With the consent of all the partners
B. In accordance with an express agreement by the partners
C. Where the partnership is at will by giving notice in writing to all other partners of his intention to retire
D. Either (A) or (B) or (C)

271. Under section 44(c) of the Indian Partnership Act, 1932, the misconduct of a partner to order dissolution of a firm must be
A. Such which is likely to affect the business prospects of the firm
B. The one connected with the business of the firm
C. Both (A) and (B)
D. Either (A) or (B)

272. The most important feature of a ‘partnership at will’ is:
A. Sharing of losses
B. Registration not needed
C. Easy dissolubility
D. Utmost Transparency

273. In which of the following cases a Set Off can be claimed?
A. ‘A’ owes the partnership firm of ‘B’ & ‘C’ Rs. 1000. ‘B’ dies leaving ‘C’ surviving. ‘A’ sues ‘C’ for a debt of Rs. 1500 due in his separate character. ‘C’ wants to set off the debt of Rs. 1000
B. ‘A’ sues ‘B’ for Rs. 20,000. ‘B’ wants to set off the claim for damages for breach of contract for specific performance
C. Both ‘A’ and ‘B’
D. None of the above

274. A firm consists of X, Y and Z. A who is not a partner, makes a representation to B that he is also a partner and on the faith of this representation B gives credit to the firm.
A. B can make A liable on the basis of holding out
B. A is estopped from denying that he is a partner in the firm
C. X, Y and Z will be liable for A’s act
D. Both A and B

275. The type of dissolution described under section 42 of the Indian Partnership Act, 1932, is
A. Contingent dissolution
B. Compulsory dissolution
C. Dissolution by the court
D. Dissolution by notice

276. The property of the firm includes all property
A. Acquired by or for the firm
B. For the purposes or in the course of business of the firm
C. Property purchased with money belonging to the firm
D. All the above

277. The provision related to the liability of a firm for the wrongful acts or for the torts is contained
A. Under section 26
B. Under section 28
C. Under section 30
D. Under section 29

278. The scope of the apparent authority of a partner is
A. The same as implied authority
B. Wider than the implied authority
C. Narrower than the implied authority
D. Either (A) or (C)

279. If several persons are partners in a firm and one of them agrees to share the profits devised by him with a stranger, the agreement, as per the law laid down in Murlidhar v. I. T. Commissioner, AIR 1967 SC 383,
A. Makes the stranger a partner in the original firm
B. Does not make the stranger a partner in the original firm
C. Makes the stranger a partner in the original firm for limited purposes
D. Makes the stranger a partner in the original firm in case of losses

280. Registration of Firm does not create Partnership, but is only the evidence of Partnership:
A. True
B. Partly True
C. False
D. Partly False

281. The relation of partnership according to Section 5 of Indian Partnership Act, 1932 arises from
A. Status
B. Contract
C. Friendship
D. None of these

282. Read Assertion (A) and Reason (R) and answer using below:
Assertion (A): Salary drawn by a partner from the firm for his services rendered to it has been treated different from his right to get an additional amount in the form of salary as his share of the firm’s profit.
Reason (R): Because R. M. Chidambaram Pillai v. Commissioner of Income Tax case laid down above principle.
A. Both (A) and (R) are correct and (R) is correct reason for (A)
B. Both (A) and (R) are wrong
C. (A) is right, but (R) is wrong
D. (R) is right, but (A) is wrong

283. Acknowledgment of a liability of the firm by a partner amounts to
A. Compromising a claim
B. Relinquishment of a claim
C. Admission of liability in a suit or proceedings against the firm
D. Neither (A) nor (B) nor (C)

284. As a general rule, by virtue of section 13 of the Indian Partnership Act, 1932
A. Partner is not entitled to interest on the capital subscribed by him
B. Partner is not entitled to interest on the advance made over and above the share of capital
C. Both (A) and (B)
D. Neither (A) nor (B)

285. Where in a contract between the partners no provision is made for duration of their partnership or for determination of their partnership, the partnership is:
A. Unlimited partnership
B. Particular partnership
C. Implied partnership
D. Partnership at will
E. None of the above

286. Under section 11 of the Indian Companies Act, 1956 for a non-banking business, the minimum number of partners can be
A. Ten
B. Twenty
C. Twenty-five
D. Thirty

287. Match List-I with List-II and select the correct answer using the given below:
List I (Principles of mutual rights and liabilities of partners) | List II (Relevant case-law)
A. Remuneration to a partner in absence of an agreement on this matter | 1. Md. Abdul Sattar v. State of Andhra Pradesh
B. Fixation of remuneration by agreement in respect of a partner does not alter his status as a partner | 2. Ghisulal v. Ghumbirmal
C. Interest on the capital of a partner | 3. Shelat Brothers v. Nanalal Harilal Shelat
D. Action against a partner for balance due to another | 4. Bhagchand v. Kaluram @ Moolchand
A. a-4, b-2, c-1, d-3
B. a-3, b-1, c-2, d-4
C. a-1, b-3, c-4, d-2
D. a-3, b-1, c-4, d-2

288. Under section 44 of the Indian Partnership Act, 1932, the court can order dissolution of a firm on the ground of insanity ordinarily where
A. A dormant partner becomes insane
B. An active partner becomes insane
C. Either (A) or (B)
D. Neither (A) nor (B)

289. An agreement to carry on business in partnership in the future creates a partnership
A. Immediately on the agreement
B. On the date mentioned in the agreement irrespective of whether the business has commenced or not on that date
C. Only on the date when the business is actually commenced
D. Never creates a partnership and any such agreement is void

290. Section 13(f) of the Indian Partnership Act, 1932 provides for
A. Indemnity in favour of the partner against the firm
B. Indemnity in favour of the firm against a partner
C. Indemnity in favour of the third parties against the firm
D. All the above

291. In the absence of a public notice of the fact of dissolution of the firm, the authority of partners
A. Stands determined between the partners as well as publicly
B. Does not stand determined between the partners nor publicly
C. Stands determined between the partners but publicly it continues
D. Stands determined publicly, but continues between the partners

292. Under section 34 of the Indian Partnership Act, 1932, on adjudication of a partner as insolvent, the partnership firm
A. Stands dissolved automatically
B. Does not dissolve at all
C. May or may not dissolve depending on the contract between the partners
D. Only (A) and not (B) or (C)

293. The outgoing partner, where the partnership business is continued by other partners without a final settlement of accounts, under section 37 of the Act, the outgoing partner is entitled to interest on the unpaid capital, at the rate of
A. 6% per annum
B. 9% per annum
C. 12% per annum
D. As decided by the partners

294. Section 29 of the Indian Partnership Act, 1932, provides for certain rights of the transferee, of the partner’s interest, in the firm
A. While the firm is a going concern
B. When the firm is dissolved
C. Both (A) and (B)
D. Only (A) and not (B)

295. Under section 55(1) of the Indian Partnership Act, 1932, the goodwill as an asset of the firm can be sold
A. Separately from the other property of the firm
B. Along with the other property of the firm
C. Either (A) or (B)
D. Only (B) and not (C)

296. The Doctrine of Holding Out is mentioned in:
A. Section 25 of the Indian Partnership Act
B. Section 28 of the Indian Partnership Act
C. Section 29 of the Indian Partnership Act
D. None of the above

297. Where a contract between the partners provides for the mode of dissolution, and the firm is dissolved in accordance with that subsisting contract, such a dissolution of firm is called
A. Dissolution by agreement under section 40 of the Act
B. Dissolution by notice under section 43 of the Act
C. Compulsory dissolution under section 41 of the Act
D. Dissolution by operation of law under section 42 of the Act

298. Section 16 of the Indian Partnership Act, 1932 is, ‘subject to’
A. The agreement between the partners
B. The provisions of the Act
C. Both (A) and (B)
D. Only (B) and not (A)

299. When the firm is named after the retiring partner, the retiring partner has a right to
A. Set up a precisely similar business under the same name
B. Set up a precisely similar business but not under the same name
C. Set up a precisely similar business under a new name which suggests a connection with the firm he has left
D. Either (B) or (C)

300. Section 68 of the Indian Partnership Act, 1932, lays down
A. The rules of procedure
B. The rules of evidence
C. The rules of adjective law
D. None of the above

301. Where a partnership firm is constituted for a fixed period and after the expiration of that term the firm continues to carry business without any agreement
A. The partnership stands extended till the new agreement is made
B. The partnership becomes the partnership at will
C. The partnership becomes illegal
D. The partnership stands dissolved on the date of the expiry of the term and no partnership can be said to be in existence

302. The term notice under section 24 of the Indian Partnership Act, 1932 has a reference to:
A. Actual notice
B. Constructive notice
C. Deemed notice
D. None of the above

303. A dissolution of a firm can be claimed under section 44(e) of the Indian Partnership Act where a partner has transferred his interest in the partnership firm to
A. A partner
B. A third party
C. All the partners
D. None of the above

304. Which of the following sections of the Indian Partnership Act bestows every partner with the authority of an agent?
A. Section 17
B. Section 19
C. Section 18
D. Section 20

305. When a minor, who was admitted to the benefits of Partnership, becomes a partner upon attaining the age of majority, his personal liability commences from:
A. The date of his first admission to benefit of partnership
B. The date of majority, if he continues in partnership
C. The date fixed by all the partners
D. Only his assets or contributions to the partnership is liable

306. Which one of the following is not correctly matched:
A. Definition of Partnership – Section 4
B. Partnership at Will – Section 7
C. Expulsion of Partner – Section 33
D. Authority of Partner in Emergency – Section 23

307. An act of a firm means:
A. Any partner or agent of the firm which gives rise to a right enforceable by or against the firm
B. Any act by all the partners
C. Any omission by all the partners
D. All of the above

308. Partnership is 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. Does it mean that losses are not shared:
A. A minor may be admitted in partnership, only for the profits, but he cannot share in losses.
B. It also depends on the partnership agreement. A person may share the profits but may not share in losses.
C. Sharing of profits also include losses (negative profits)
D. All of the above

309. Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is called as:
A. Particular partnership
B. Partnership for a fixed term
C. Partnership at will
D. None of the above

310. What information shall be given to the Registrar of Firms by a registered partnership firm:
A. New opening/closing of the existing branch, if any.
B. Change in the name of and address of the partner(s)/change in the constitution of the firm.
C. What there is change in the name of the firm or in location of the principal place of business.
D. All of the above

311. Who can inspect the Register and filed documents at the office of the Registrar:
A. Any Government servant
B. The Partners of the firm
C. The partners of the other firms
D. Any person

312. What are the rights of partners after dissolution:
A. To have the surplus distributed among the partners or their representatives according to their rights.
B. To have business wound up after dissolution
C. To have the property of the firm applied in payment of the debts and liabilities of the firm.
D. All of the above

313. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of on the amount of his share in the property of the firm:
A. Nine per cent, per annum
B. Eighteen per cent, per annum
C. Six per cent per annum
D. Twelve per cent, per annum

314. The dissolution of partnership means:
A. It means the dissolution of partnership between all the partners of a firm
B. It means the change in the relations of the partners
C. It means the reconstitution of the firm.
D. None of the above

315. In what circumstances a partner may retire:
A. In accordance with an express agreement by the partners
B. Where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
C. With the consent of all the other partners
D. All of the above

316. What would be the position, where a minor elects not to become a partner:
A. He shall be entitled to sue the partners for his share of the property and profits.
B. His rights and liabilities shall continue to be those of a minor under this section up to the date on which he gives public notice.
C. His share shall not be liable for any acts of the firm done after the date of the notice.
D. All of the above

317. After a partner’s death the business is continued in the old firm name. Whether the legal heirs of the deceased partner are liable for any acts of the firm:
A. The continued use of the name or of the deceased partner’s name as a part thereof shall not of itself make his legal representative or his estate liable for any act of the firm done after his death.
B. If the estate of the deceased person’s property is insufficient to make good, the personal assets of the legal heirs will be liable for any of the acts done by the firm.
C. The estate of the deceased person is liable for any of the act done by the firm.
D. The legal heirs of the deceased partners shall be liable for any of the act done by the firm after the demise of the partner

318. The partners in a firm may, by contract between the partners:
A. Restrict the implied authority of any partner
B. Extend the implied authority of any partner
C. None of the above
D. Both A and B are correct

319. Whether a notice given to a partner, who habitually acts in the business of the firm of any matter relating to the affairs of the firm, will be deemed as notice to the firm:
A. It will deemed as personal information to that partner
B. Yes, it operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner
C. It depends on the nature of the concerned partner whether he informs so to other partners
D. No, it will not deemed as notice to the firm.

320. What would be the position where a minor elects to become a partner.
A. His share in the property and profits of the firm shall be the share to which he was entitled as a minor
B. His rights and liabilities as a minor continue up to the date on which he becomes a partner
C. He also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership
D. All of the above

321. When there is any change in the constitution of the firm, what would be the status of the continuing guarantee given to the firm:
A. It shall be revoked as to future transactions from the date of any change in the constitution of the firm.
B. Since it is the continuing guarantee, hence it be continuing.
C. Only the parties to the continuing guarantee can only decide over the matter.
D. None of the above.

322. Where a partner wilfully or persistently commits breach of agreements relating to the management of the affairs of the firm or the conduct of its business, or otherwise so conducts himself in matters relating to the business that it is not reasonably practicable for the other partners to carry on the business in partnership with him. The other partner(s) may:
A. The partnership firm comes to an end automatically
B. The other partners may decide to leave the firm.
C. File a suit in the court for the dissolution of the firm.
D. The other partners may decide to expel the concerned partner

323. Who is not liable for the acts of the partners done after dissolution, if done before the dissolution, until public notice is given of the dissolution:
A. A partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm (sleeping or dormant partner).
B. The estate of a partner who dies
C. Who is adjudicated an insolvent
D. All of the above

324. Where a partner has paid a premium on entering into partnership of a fixed term, and the firm is dissolved before the expiration of that term otherwise than by the death of a partner, whether any repayment of the premium is permissible:
A. He will not be entitled for repayment of the premium if the dissolution is mainly due to his own misconduct
B. He will not be entitled for repayment of the premium if the dissolution is in pursuance of an agreement containing no provision for the return of the premium or any part of it
C. He shall be entitled to repayment of the premium or of such part thereof as may be reasonable, regard being had to the terms upon which he became a partner and to the length of time during which he was a partner
D. All of the above

325. Whether a partner after dissolution of the partnership firm, can carry on the business in the erstwhile business name of the firm:
A. He can use the business name of the dissolved firm name, if he has bought the goodwill of the firm.
B. He can’t use the business name of the dissolved firm.
C. He can use the business name of the dissolved firm, provided there was a contract between the partners of the dissolved firm
D. Both the points mentioned at A and C are correct

326. The State Government may appoint Registrars of Firms for the purposes of this Act, every Registrar shall be deemed:
A. To be a Central Government Servant.
B. To be a public servant within the meaning of section 21 of the Indian Penal Code
C. To be State Government Servant
D. To be a private servant

327. What is the penalty for submission of false particulars to the Registrar of Firms:
A. He shall be punishable with imprisonment which may extend to three months, or with fine, or with both
B. He shall be punishable with imprisonment which may extend to four months, or with fine, or with both.
C. He shall be punishable with imprisonment which may extend to two months, or with fine, or with both
D. He shall be punishable with imprisonment which may extend to one month, or with fine, or with both

328. What matters require notice to Registrar of Firms under section 63, and Public Notice by publication in the Official Gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates, has its place or principal place of business:
A. The dissolution of a registered firm
B. The election to become or not to become a partner in a registered firm by a person attaining majority who was admitted as a minor to the benefits of partnership
C. Retirement or expulsion of a partner from a registered firm
D. All of the above

329. What is the amount of fee which shall accompany the documents sent to the Registrar of Firms, or which shall be payable for the inspection of documents in the custody of the Registrar of Firms, or for copies from the Register of Firms:
A. The fees prescribed by each of the State shall not exceed the maximum fees specified in Schedule I of the Indian Partnership Act, 1932
B. The State Government may by notification in the Official Gazette make rules describing the schedule of fees.
C. Both A and B are correct.
D. None of the above.

330. Non-registration of a firm will not affect:
A. The right of the partner to sue for the dissolution of the firm, or for the accounts of the dissolved firm, or for share of the property of the dissolved firm.
B. All of the following
C. The right to any suit or claim of set-off not exceeding Rs. 100 in value
D. The right of a firm or partners of a firm having no place of business in India.

331. Where a partner has in any way transferred the whole of his interest in the firm to a third party, or has allowed his share to be charged under the provisions of rule 49 of Order XXI of the First Schedule to the Code of Civil Procedure, 1908, or has allowed it to be sold in the recovery of arrears of land revenue or of any dues recoverable as arrears of land revenue due by the partner:
A. The court may not dissolve the firm at the instance of any other partner(s).
B. The court may direct other partners to reconstitute the firm by excluding that concerned partner
C. The court may dissolve the firm at the instance of any other partner(s)
D. The court may expel the concerned partner, who has done wrong, from the partnership firm

332. How a firm may be dissolved:
A. A firm may be dissolved by the Court order.
B. A firm may be dissolved in accordance with a contract between the partners
C. All of the above.
D. None of the above

333. On attaining the majority, the minor partner has to decide and give a public notice within the prescribed period, whether he will continue as partner in the firm or will quit. What is that prescribed period:
A. Within twelve months of his attaining majority or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later
B. Within three months of his attaining majority or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later
C. Within six months of his attaining majority or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later
D. Within nine months of his attaining majority or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later

334. In which conditions a person may be deemed as partner by estoppels or holding out:
A. When he by his conduct represents himself to be a partner in a firm
B. When knowingly permits himself to be represented, to be a partner in a firm.
C. When he expressly by words spoken or written lets the others know that he is a partner in a firm.
D. All of the above

335. M/s XYZ is partnership firm and X, Y and Z are the partners. During the course of business travel, partner X recovered a sum of Rs. 15000 in cash from the debtor of the firm and credited it to his personal bank account. The act of X will amount to:
A. After utilising the amount for few days, he returned back the money to the firm, so it will not come under the mis-appropriation of the funds.
B. Nothing wrong in it, since he has personally made efforts in realising the dues from the debtor.
C. Mis-appropriating the funds of the firm and utilisation of the same for personal gain.
D. None of the above.

336. What are the general duties of a partner:
A. To render true accounts and full information of all things affecting the firm to any partner or his legal representative
B. To carry on the business of the firm to the greatest common advantage
C. To be just and faithful to each other
D. All of the above.

337. A consideration is must for every contract. Partnership is also an agreement enforceable at law, hence it is also a contract to carry on the business for profit. Is consideration essential for the formation of the partnership:
A. Partnership is an extension of the law of agency hence no consideration is required
B. Yes, consideration is must for the formation of the partnership.
C. There is no need to have consideration in formation of the partnership since no consideration is required to create an agency.
D. Only A and C are correct.

338. After the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners shall continue:
A. To complete transactions begun but unfinished at the time of the dissolution.
B. To wind up the affairs of the firm
C. Both A and B are correct.
D. None of the above.

339. What shall be the treatment of goodwill in settling the accounts of a firm after dissolution:
A. The assessment of the amount of goodwill is a difficult task and cannot be precisely calculated, hence it should not be considered
B. The goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm.
C. The goodwill is an intangible asset and should not be accounted for.
D. None of the above.

340. How the settlements of debts will be made in case there are joint debts due from the firm, and also separate debts due from any partner:
A. Debts of the firm shall be paid first out of the property of the firm, but in case of private debts of the partners, it shall be paid last (if there is residue) after paying all the dues of the firm
B. Debts of the firm shall be paid first out of the property of the firm, but in case of private debts of the partners, it shall be paid last (if there is residue) after paying all the dues of the firm.
C. Debts of the firm shall be paid first out of property of the firm and if there is any surplus, it shall be distributed among the partners
D. Both A and C are correct.

341. Which is the implied authority of a partner:
A. To carry on the business of the firm, in the usual way.
B. Compromise or relinquish any claim or portion of a claim by the firm
C. Submit a dispute relating to the business of the firm to arbitration
D. Open a banking account on behalf of the firm in his own name

342. Subject to contract between the partners, the property of the firm includes:
A. Acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of business of the firm
B. The goodwill of the business.
C. All property and rights and interests in property originally brought into the stock of the firm
D. All of the above.

343. Where partnership deed is silent, which of the following statement is NOT correct:
A. The partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm.
B. A partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of 18% per annum.
C. A partner is not entitled to receive remuneration for taking part in the conduct of the business
D. Where a partner is entitled to interest on the capital subscribed by him such interest shall be payable only out of profits

344. A transfer by a partner of his interest in the firm, either absolute or by mortgage, or by the creation by him of a charge on such interest, does entitle the transferee, during the continuance of the firm:
A. To require accounts of the firm
B. To inspect the books of the firm
C. Only to receive the share of profits of the transferring partner, and the transferee shall accept the account of profits agreed to by the partners
D. To interfere in the conduct of the business of the firm

345. What is the liability of a retiring partner, after the date of his retirement:
A. He shall not be liable for the act done by other partners during his tenure in the partnership firm.
B. He and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement
C. He shall be liable for the acts done by him only on behalf of the firm during his tenure, towards the third party.
D. Only A and B are correct

346. An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not:
A. Solicit the custom of persons who were dealing with the firm before he ceased to be a partner. Agreements in restraint of trade.
B. Use the firm name
C. Represent himself as carrying on the business of the firm
D. All of the above

347. The dissolution of firm means:
A. It means the dissolution of partnership between all the partners of a firm.
B. It means the change in the relations of the partners.
C. It means the reconstitution of the firm.
D. Only B and C are correct

348. What are certain contingencies when the firm has to be dissolved (subject to contract):
A. By the death of a partner and by the adjudication of a partner as an insolvent.
B. If constituted for a fixed term, by the expiry of that term
C. If constituted to carry out one or more adventures or undertakings, by the completion thereof
D. All of the above