Indian Partnership Act MCQ question and answer

1

Where a firm is carrying on more than one type of business, under the proviso to section 41(b) of the Act, the firm escapes compulsory dissolution if

A) All the businesses remain lawful B) Majority of the businesses remain lawful C) Least business remains lawful D) Either (A) or (B) or (C)

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Answer & Solution

Answer: Option C

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2

'Notice to a partner is a notice to the firm' has been provided under

A) Section 23 of the Act B) Section 25 of the Act C) Section 24 of the Act D) Section 26 of the Act

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Answer & Solution

Answer: Option C

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3

Which of the following amounts to enforcement of a right, by a partner of an unregistered firm, arising out of a contract between the parties

A) An action between two former partners to enforce an agreement restraining an outgoing partner from carrying on in some area any business similar to that of the firm B) Suit for recovery of money due on a contract entered into between the partners of an unregistered firm after settlement of accounts between partners of a dissolved firm C) Suit for permanent injunction for passing off D) Neither (A) nor (B) nor (C)

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Answer & Solution

Answer: Option D

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4

The liability of holding out is based upon the legal principle of

A) Estoppel B) Agency C) Vicarious liability D) Constructive liability E) All of the above

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Answer & Solution

Answer: Option A

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5

Partnership as defined in the Indian Partnership Act, is the relation between persons who have agreed to share the . . . . . . . . of a business carried on by all or any of them acting for all.

A) Profit B) Loss C) Expenses D) Capital

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Answer & Solution

Answer: Option A

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6

On the death of a partner, public notice of death is not given and the firm continues the business, then for the acts of firm done after his death, the estate of the deceased partner is

A) Proportionately liable B) Treated as security C) Not liable D) Liable

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Answer & Solution

Answer: Option C

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7

Which of the following is a strong but not sufficient test of partnership

A) Sharing of profits B) Sharing of losses C) Either of the two D) None of the above

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Answer & Solution

Answer: Option A

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8

Reconstitution of a partnership firm means and implies that

A) The firm became extinct and thereafter reformulated B) The firm never became extinct and continued under altered circumstances as to membership C) A change in the profit sharing ratio with all existing partners D) Only (A) and not (B) or (C)

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Answer & Solution

Answer: Option B

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9

Subject to the contract between the partners, the property of the firm shall be:

A) Held and used by the partners exclusively for the purposes of business B) Not held and used by the partners exclusively for the purposes of business C) Shall be deposited into the bank custody D) None of above

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Answer & Solution

Answer: Option A

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10

On the death of a sole proprietor, his heirs automatically become the partners of old firm. The statement is

A) True B) False C) Partly true D) None of the above

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Answer & Solution

Answer: Option B

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Indian Partnership Act MCQ question and answer | Law MCQ question