Forms of Business Organisations Test

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Forms of Business Organisations Test - 50

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following is not a right of partner?

A
Every partner has a right to continue in the partnership and not to be expelled from it

B
A partner has power to act in an emergency for protecting the firm from loss

C
Every partner is entitled to share in the profits equally

D
Every partner is entitled to the introduction of a new partner into the firm without consent other partner

Solution

According to the Partnership Act 1932, a partner has no right to any introduction as a new partner into the firm without the consent of other partners.
Hence, option (D) is the correct answer.
Question 2
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Subject to contract between the partners, for taking part in the conduct of the business, a partner is _________.

A
Not entitled to receive any remuneration

B
Entitled to reasonable remuneration

C
Entitled to remuneration based on profits

D
Entitled to remuneration in the ratio of their capital

Solution

According to the Partnership Act 1932, the partners those are in agreement with the partnership deed who are taking part in the conduct of business and management of the firm are not entitled to receive any remuneration of any sort.
Question 3
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In good faith and based on the contract between partners, a partner may be expelled from the firm by ______________.

A
Unanimous consent of all the partners

B
Majority of the partners

C
Any of the working partners

D
Any of the dormant partners

Solution

According to the Partnership Act 1932, the partners those are in agreement with the partnership deed who are taking part in the conduct of business and management of the firm and those who are dormant partners can decide on majority whether to expel a partner or not otherwise in good faith.
Question 4
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Failure by a minor to give public notice within $$6$$ months will have the following effect ___________.

A
The partnership firm stands dissolved

B
Minor automatically becomes partner

C
Minor automatically ceases to be a partner

D
The partnership becomes an illegal association

Solution

According to the Partnership Act, 1932 a minor can be admitted as a partner in a partnership firm with the consent of all the partners in the agreement where the minor will share only the profits or gains of the firm and he will have no share in the firms loss.
A minor has to give a public notice whether he wants to be admitted in the partnership firm or not within the six months on his attaining maturity or obtaining knowledge of his admission as a partner. If a minor does not give the public notice then they automatically become the partner of the firm.
Question 5
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For admitting a minor into the benefits of the partnership, which of the following is required?

A
Consent of majority partners

B
Consent of parent or guardian

C
Consent of all the partners

D
Consent of $$3/4$$th partners

Solution

A minor can be admitted as a partner in a partnership firm with the consent of all the partners in the agreement where the minor will share only the profits or gains of the firm and he will have no share in the firm's loss. The minor can even inspect the books of accounts of the firm. A minor can be admitted as a partner to claim the benefits of the business only by the consent of all the other partners.
Hence, option (C) is the correct answer.
Question 6
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Every partner is bound to indemnify the firm for any loss caused by ________ in the conduct of the business.

A
Fraud

B
Misrepresentation

C
Mistake

D
Undue influence

Solution

According to the Partnership Act 1932, the liability of the partners are unlimited and they are bound to compensate with the loss of the firm that is caused by the fraud in the conduct of business.
Question 7
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Which of the following is NOT covered by general duties of partners?

A
To carry on the business of the firm to the greatest common advantage of the firm

B
To be just and faithful to each other

C
To arrange for audit of accounts of the firm

D
To keep and render true, proper and correct accounts of the partnership

Solution

In a partnership business, the partners cannot arrange for the audit of the accounts of the firm that is done by the Accounts authority of that company.
Question 8
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Every partner is bound to carry on the business of the firm _________.

A
To the advantage of the working partner

B
For reasonable advantage

C
For the advantage of society

D
To the greatest common advantage

Solution

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. The basic existence of partnership agreement lies in Mutual agency relationship which refers to the mutual relationship and understanding between the partners of a business where every partner acts as an agent as well as a boss for the other partner. Therefore, every partner is bound to carry on the business of the firm to the greatest common advantage.
Question 9
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To bind the firm under implied authority, the act must be done in the ________ of carrying on the firm's business.

A
Regular way

B
Usual way

C
Routine way

D
Extraordinary way

Solution

Implied Authority is the authority that is not conferred by the mutual agreement between the partners and which is not bind on other partners. This authority is acted on the ordinary course of business and the firm is bound by such authority when the act is done in a normal way of carrying on the firm's business. These authority is also known as ostensible authority or apparent authority.
Question 10
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In the absence of an agreement to the contrary, every partner is bound to share losses ______________.

A
Equally

B
In proportion to capital

C
In proportion to their private assets

D
$$50\%$$ loss equally and balance $$50\%$$ in their capital ratio

Solution

According to the Partnership Act 1932, in the absence of an agreement to the contrary, every partner has an equal right to participate in the conduct and management of the business and has an equal share in the profit or loss of the firm, mentioned otherwise.
Hence, A is the correct option.

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Forms of Business Organisations Test - 50

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Forms of Business Organisations Test - 50

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SHARING IS CARING

Question 1

Every partner has a right to continue in the partnership and not to be expelled from it

A partner has power to act in an emergency for protecting the firm from loss

Every partner is entitled to share in the profits equally

Every partner is entitled to the introduction of a new partner into the firm without consent other partner

Solution

Question 2

Not entitled to receive any remuneration

Entitled to reasonable remuneration

Entitled to remuneration based on profits

Entitled to remuneration in the ratio of their capital

Solution

Question 3

Unanimous consent of all the partners

Majority of the partners

Any of the working partners

Any of the dormant partners

Solution

Question 4

The partnership firm stands dissolved

Minor automatically becomes partner

Minor automatically ceases to be a partner

The partnership becomes an illegal association

Solution

Question 5

Consent of majority partners

Consent of parent or guardian

Consent of all the partners

Consent of $$3/4$$th partners

Solution

Question 6

Fraud

Misrepresentation

Mistake

Undue influence

Solution

Question 7

To carry on the business of the firm to the greatest common advantage of the firm

To be just and faithful to each other

To arrange for audit of accounts of the firm

To keep and render true, proper and correct accounts of the partnership

Solution

Question 8

To the advantage of the working partner

For reasonable advantage

For the advantage of society

To the greatest common advantage

Solution

Question 9

Regular way

Usual way

Routine way

Extraordinary way

Solution

Question 10

Equally

In proportion to capital

In proportion to their private assets

$$50\%$$ loss equally and balance $$50\%$$ in their capital ratio

Solution

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