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Complete resources on Partnership Act
Complete resources on Partnership Firm Formation
1. A Partnership deed must be drafted properly and stamped according to provisions of
(a) Indian Stamp Act, 1899
(b) The Companies Act, 1956
(c) Indian Contract Act, 1872
(d) None of the above
A partnership deed must be drafted properly, signed by all the partners and stamped in accordance with the Indian Stamp Act. Hence, option (a) is the correct answer.
2. Partnership Deed signifies
(a) Agreement between the Partners
(b) Application to Registrar
(c) Certificate of Registered Partnership
(d) The cessation of partnership among the partners.
Partnership Deed signifies agreement between the Partners. Hence, option (a) is the correct answer.
3. In the absence of specific provision in the Partnership Deed, every partner is bound to contribute in………. to the losses of the firm.
(a) Equally
(b) Profit Sharing Ratio
(c) Capital-Gearing Ratio
(d) Debt-equity ratio.
If there is no specific provision in the Partnership Deed, every partner is bound to contribute the losses of the firm in their Profit Sharing Ratio. Hence, option (b) is the correct answer.
4. In absence of partnership deed, interest on capital is payable @
(a) 12% p.a
(b) 6% p.a
(c) 5% p.a
(d) Not payable.
In the absence of an agreement, no partner is entitled to any interest on capital invested by him in the firm. Hence, option (d) is the correct answer.
5. In the absence of partnership deed, the profits will be distributed among the partners in the
(a) Capital Ratio
(b) Equal Ratio
(c) Sacrifice Ratio
(d) Debt-equity ratio.
In the absence of any agreement, the partners are entitled to share equally in the profits earned by the firm. Hence, option (b) is the correct answer.
6. A firm can be registered only by the
(a) Registrar of Firms
(b) Registrar of Companies
(c) Trade License Authority
(d) Any of the above
Only a Registrar of Firms can enter the name of the firm into the Register of Firms. Hence, option (a) is the correct answer.
7. Registration of Partnership Firm is
(a) Voluntary
(b) Compulsory
(c) Illegal
(d) None of the above
The Partnership Act does not provide for the compulsory registration of firms. But indirectly, to overcome certain disabilities from which an unregistered firm suffers, registration of firms is in the benefits of partners. Hence, option (a) is the correct answer.
8. An application for registration of a Firm shall not state :
(a) Firm’s name
(b) Place or principal place of business
(c) Date of joining of each partner of the firm
(d) Details of Capital Contribution of Partners.
Details of capital contribution of partners is not required to be given in an application at the time of registration of a Firm. Hence, option (d) is the correct answer.
9. XYZ, a partnership firm, was constituted on 1.4.2009. On 25th April the partners resolved to get the firm registered with the Registrar of Firm.
The firm prepared the necessary documents for registration on 26th April which were signed on 28th April. They sent the documents to the Registrar office on 30th April by Registered post which was received in the Registrar office on 4th May, 2009. The Registrar filed the statement and entered the firms name in the Register of Firms on 20th May, 2009. The firm will be deemed to have been registered on:
(a) 30th April
(b) 28th April
(c) 20th May
(d) 4th May.
Registration is effective from the date when the Registrar files the statement and makes entries in the Register of Firms. So, the firm will be deemed to have been registered on 20th May, 2009. Hence, option (c) is the correct answer.
10. Register of firm is open to inspection to General Public
(a) At Free of cost
(b) On payment of a prescribed fee
(c) Only to the partners of the firm
(d) Not open for Inspection
According to s.66(1), the Register of Firms shall be open to inspection by any person on payment of prescribed fee. Hence, option (b) is the correct answer.
11. If a firm is not registered, it has no right to
(a) claim set-off
(b) suit between Partners and Firm
(c) suit by firm on a third party
(d) All of the above.
An unregistered firm cannot sue the firm or any partners of the firm and even a third party to enforce a right arising from a contract. It also cannot claim a set-off. Hence, option (d) is the correct answer.
12. X is indebted to the firm for a sum of Rs.3,000. Can firm file a suit against X for recovery of the amount
(a) No, because the firm is unregistered
(b) No, because the sum doesn’t exceed Rs.5,000
(c) Yes, any firm can file a suit for realizing its debt, whether it is registered or not
(d) Yes, the firm can file suit with the permission of Registrar of Firms.
The firm must be a registered firm by the date of the institution of the suit. Unregistered firm cannot file a suit against X. Hence, option (a) is the correct answer.
13. Partnership property vests
(a) In the active partners of the firm
(b) In the firm itself
(c) In the creditors of the firm
(d) In the registrar of the firm.
Any property which is acquired in the name of the firm is partnership property. The partnership property vests in the firm itself. Hence, option (b) is the correct answer.
14. The term “Property of the firm” does not include.
(a) Rights and interest in property originally brought into the stock of the firm
(b) Property acquired with firm’s money
(c) Goodwill of the business
(d) Property of the partners.
s.14 provides that the ‘property of the firm’ includes property, rights and interest in property originally brought into the stock of the firm, property acquired by or for the firm and goodwill of the business of the firm. But it does not include property of the partners. Hence, option (d) is the correct answer.
