Steps involved in Establishing Business Test 30

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Steps involved in Establishing Business Test 30

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Question 1
1 / -0

To whom the property of the firm belongs?

A
Partners

B
Working partner of the firm

C
Firm and not to individual partners

D
Property belongs to both partners and firm

Solution

A partnership basically refers to the contract between two or more people who have agreed to carry on certain businesses in order to achieve common goals. In the absence of any partnership deed, all the property, rights and interest contribute by the individual partners, all the property acquired in the course of the business, and the goodwill of the business is considered as the property of the firm.
Hence, option (C) is the correct answer.
Question 2
1 / -0

Identify which sentence is correct and which is incorrect.
A. A sub-partner can bind the firm or other partners by his acts.
B. Sub-partner has rights or duties towards the firm and does carry liability for the dents of the firm.
C. Minor partner is entitled to his agreed share
D. Minor can inspect books of account of the firm.
Select the correct answer from the options given.

A
Sentence A & B are incorrect while sentence C and D are correct

B
Sentence B & C are incorrect while sentence A & B are correct

C
Sentence A, B & C are correct while sentence D is incorrect

D
Sentence B, C & D are correct while sentence A is incorrect

Solution

When a partner of the firm agrees to share his own share of profits with an outsider then it is called sub-partners. They have no rights in the firms' business they just have share in the firms profit or loss and therefore other partners are not bound by the sub-partners act.
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.
Question 3
1 / -0

Which of the following statement is incorrect as to a minor's position in a partnership firm?

A
Minor is admitted to a share of partnership profits

B
Minor is personally liable to contribute to the losses

C
Minor is entitled to a share of the firm's property

D
Minor can inspect and copy any of the firm's accounts

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.
Hence, option (B) is the correct answer.
Question 4
1 / -0

Property of the firm shall be held by use of the partners __________________.

A
Exclusively for business purpose

B
For business purposes as well as private purposes of the partners

C
For the private purposes of the partners

D
For business purposes but in exceptional cases it can used for private purpose

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. In the absence of any partnership deed, all the property, rights and interest contribute by the individual partners, all the property acquired in the course of the business and the goodwill of the business is considered as the property of the firm. These properties should be used by all the partners exclusively for business purpose only.
Question 5
1 / -0

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 6
1 / -0

In the absence of agreement, express or implied, the property of the firm is deemed to include _______________________________.

A
All property, rights and interest which have been brought into the common stock for the purposes of the partnership by individual partners, whether at the commencement of the business or subsequently added there to

B
Those acquired in the course of the business with money belonging to the firm

C
The goodwill of the business

D
All of the above

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. In the absence of any partnership deed, all the property, rights and interest contribute by the individual partners, all the property acquired in the course of the business and the goodwill of the business is considered as the property of the firm.
Question 7
1 / -0

Identify the incorrect sentence.

A
A sub-partner is not connected with the firm

B
A sub-partner has no relationship with other partners in the firm

C
A sub-partner has a right in the firm's business

D
A sub-partner can claim his agreed share from the partner with whom he entered into sub-partnership

Solution

When a partner of the firm agrees to share his own share of profits with an outsider then it is called sub-partners. They have no rights in the firms' business they just have share in the firms profit or loss.
Question 8
1 / -0

Which of the following partners are not liable in relation to the firm?

A
Partner by holding out

B
Working partner

C
Sub-partner

D
Partner by estoppel

Solution

When a partner of the firm agrees to share his own share of profits with an outsider then it is called sub-partners. They have no rights in the firms' business they just have share in the firms profit or loss and therefore other partners are not bound by the sub-partners act.
Question 9
1 / -0

A and B entered into an agreement to carry on a business of manufacturing and selling toys. Each one of them contributed Rs. $$35$$ lakhs as their capital with a condition that A and B will share the profits equally, but the loss, if any is to be borne by A alone. Referring to the provisions of the Indian Partnership Act, $$1932$$ decide whether there exists a partnership between A and B.

A
There is no partnership between A and B

B
A is sub-partner of B

C
There is partnership by holding out

D
There is partnership between A and B. A is partner in profit only

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. A partner that only shares profit is regarded as a partner in profit and therefore A is a normal partner and B is a partner in profit only.
Question 10
1 / -0

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.

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Steps involved in Establishing Business Test 30

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Steps involved in Establishing Business Test 30

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SHARING IS CARING

Question 1

Partners

Working partner of the firm

Firm and not to individual partners

Property belongs to both partners and firm

Solution

Question 2

Sentence A & B are incorrect while sentence C and D are correct

Sentence B & C are incorrect while sentence A & B are correct

Sentence A, B & C are correct while sentence D is incorrect

Sentence B, C & D are correct while sentence A is incorrect

Solution

Question 3

Minor is admitted to a share of partnership profits

Minor is personally liable to contribute to the losses

Minor is entitled to a share of the firm's property

Minor can inspect and copy any of the firm's accounts

Solution

Question 4

Exclusively for business purpose

For business purposes as well as private purposes of the partners

For the private purposes of the partners

For business purposes but in exceptional cases it can used for private purpose

Solution

Question 5

The partnership firm stands dissolved

Minor automatically becomes partner

Minor automatically ceases to be a partner

The partnership becomes an illegal association

Solution

Question 6

All property, rights and interest which have been brought into the common stock for the purposes of the partnership by individual partners, whether at the commencement of the business or subsequently added there to

Those acquired in the course of the business with money belonging to the firm

The goodwill of the business

All of the above

Solution

Question 7

A sub-partner is not connected with the firm

A sub-partner has no relationship with other partners in the firm

A sub-partner has a right in the firm's business

A sub-partner can claim his agreed share from the partner with whom he entered into sub-partnership

Solution

Question 8

Partner by holding out

Working partner

Sub-partner

Partner by estoppel

Solution

Question 9

There is no partnership between A and B

A is sub-partner of B

There is partnership by holding out

There is partnership between A and B. A is partner in profit only

Solution

Question 10

Consent of majority partners

Consent of parent or guardian

Consent of all the partners

Consent of $$3/4$$th partners

Solution

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