Here is the rest set of 1multiple-choice questions on the Indian Partnership Act, 1932:
- A partnership formed for a single venture is called:
a) Limited partnership
b) Particular partnership
c) General partnership
d) Partnership at will
Answer: b) Particular partnership
Explanation: A particular partnership is formed for a single venture or transaction, as specified in Section 8. - Which section of the Act governs the liability of a partner for the acts of the firm?
a) Section 18
b) Section 20
c) Section 25
d) Section 28
Answer: c) Section 25
Explanation: Section 25 provides that all partners are jointly and severally liable for the acts of the firm. - Who can dissolve a partnership firm in case of disagreement among partners?
a) Registrar of Firms
b) Court
c) Majority of partners
d) Ministry of Corporate Affairs
Answer: b) Court
Explanation: If partners cannot resolve disputes, the court may dissolve the firm under Section 44. - The authority of a partner to represent the firm ceases in cases of:
a) Death of a partner
b) Insolvency of a partner
c) Dissolution of the firm
d) All of the above
Answer: d) All of the above
Explanation: The authority ceases when events like death, insolvency, or dissolution occur. - Which of the following acts fall outside the implied authority of a partner?
a) Purchasing goods on behalf of the firm
b) Settling accounts of the firm
c) Selling the firm’s goodwill
d) Borrowing money for business purposes
Answer: c) Selling the firm’s goodwill
Explanation: Selling goodwill is beyond a partner’s implied authority and requires consent from all partners. - Which section provides for the property of the firm?
a) Section 12
b) Section 14
c) Section 20
d) Section 23
Answer: b) Section 14
Explanation: Section 14 specifies what constitutes partnership property. - Which of the following is NOT a mode of partnership dissolution?
a) By mutual agreement
b) By expulsion of a partner
c) By notice in a partnership at will
d) By insolvency of all partners
Answer: b) By expulsion of a partner
Explanation: Expulsion of a partner does not dissolve the firm; it leads to reconstitution. - The registration of a partnership firm takes effect from the date of:
a) Execution of the partnership deed
b) Filing the application with the Registrar of Firms
c) Issuance of the registration certificate
d) Approval by the majority of partners
Answer: c) Issuance of the registration certificate
Explanation: Registration is effective from the date the Registrar issues the certificate. - A partner may not be expelled unless the power to do so is:
a) Exercised in good faith
b) Specifically provided in the partnership deed
c) Approved by the majority of partners
d) All of the above
Answer: d) All of the above
Explanation: Expulsion must follow the conditions in Section 33 and the partnership deed. - Which of the following is NOT a duty of a partner?
a) To act in good faith
b) To account for personal profits made using firm assets
c) To conceal business opportunities for personal gain
d) To indemnify the firm for willful neglect
Answer: c) To conceal business opportunities for personal gain
Explanation: Concealing business opportunities breaches a partner’s duty of good faith. - A minor’s share in the firm can be recovered from:
a) His personal property
b) The firm’s assets only
c) The profits earned by the firm
d) His guardian’s property
Answer: b) The firm’s assets only
Explanation: A minor’s share is limited to the firm’s assets, not personal liability. - Partners’ rights and obligations are usually governed by:
a) Partnership Act only
b) Partnership deed
c) Government rules
d) Registrar’s instructions
Answer: b) Partnership deed
Explanation: The partnership deed governs the rights and obligations unless specified otherwise in the Act. - A public notice is NOT required in case of:
a) Dissolution of a firm
b) Admission of a new partner
c) Retirement of a partner
d) Change of partnership name
Answer: d) Change of partnership name
Explanation: Public notice is mandatory for retirement, admission, or dissolution, but not for a name change. - The Indian Partnership Act, 1932 came into force on:
a) 1st January 1932
b) 1st April 1932
c) 1st July 1932
d) 1st October 1932
Answer: c) 1st July 1932
Explanation: The Act came into force on 1st July 1932. - What is the status of a partnership firm in India?
a) A separate legal entity
b) A joint-stock company
c) Not a separate legal entity
d) A limited liability entity
Answer: c) Not a separate legal entity
Explanation: A partnership firm is not considered a separate legal entity distinct from its partners. - An act beyond the scope of implied authority is valid if:
a) Ratified by other partners
b) Done by a senior partner
c) Approved by the Registrar
d) Done in the interest of the business
Answer: a) Ratified by other partners
Explanation: Ratification by all partners makes an act valid, even if beyond implied authority. - What is the maximum number of partners allowed in a banking business?
a) 10
b) 15
c) 20
d) 50
Answer: a) 10
Explanation: Under the Companies Act, 2013, a partnership in banking is limited to 10 members. - The term “Partner by holding out” is related to:
a) Section 25
b) Section 28
c) Section 30
d) Section 32
Answer: b) Section 28
Explanation: Section 28 deals with liability of a person representing themselves as a partner. - What happens if the firm’s business becomes unlawful?
a) The firm can continue business with government permission
b) The firm must dissolve
c) Partners must pay fines
d) Partners must change the firm name
Answer: b) The firm must dissolve
Explanation: Unlawfulness of the business leads to compulsory dissolution under Section 41. - A nominal partner is liable to third parties:
a) Only for his share of profits
b) To the extent of his capital contribution
c) As if he were a real partner
d) Not at all
Answer: c) As if he were a real partner
Explanation: A nominal partner is liable to third parties for acts of the firm as a real partner.